Call Option
This is the right, but not the obligation, to purchase shares at a specified price at a specified date in the future. See Options.For this privilege, the buyer pays a premium which would be a fraction of price of underlying security. You are gambling that the share price will rise above the option price. If this happens you can buy the shares & sell them immediately for a profit.If the share price doesn't rise above your option price, you do not exercise the option & it expires - all you have lost is the initial payment made to purchase the option. |
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