Definition of Call option

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TeachMeFinance.com - explain Call option



Call option

The term 'Call option ' as it applies to the area of agriculture can be defined as ' A contract that entitles the buyer the right, but not the obligation, to purchase an underlying futures contract at a stipulated basis or strike price at any time up to the expiration of the option. The buyer pays a premium to the seller for this contract. A call option is bought with the expectation of a rise in prices. See put option'.

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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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