Call Option
A call option gives the holder the right (not obligation) to buy an asset at a specific price (strike) before a specific date (expiration). You profit if the asset rises above the strike price.
Understanding the Concept
Calls are bullish bets with defined risk. You pay a premium for the right to buy. If the stock moons, you profit. If it doesn't reach your strike, you only lose the premium—not infinite money. Options offer leverage without the liquidation risk of futures. A $5 call option controlling $500 of stock gives 100x notional exposure. But options decay—time works against buyers. 75% of options expire worthless. Crypto options exist on Deribit and other platforms. Understanding calls unlocks strategies like covered calls for income and LEAPS for leveraged long-term bets.
Real-World Example
Apple trades at $180. You buy a $200 call expiring in 3 months for $3. Apple rises to $220. Your call is worth at least $20 (intrinsic). You paid $3, so profit is $17 per share. That's 567% return while the stock moved 22%.
How Strykr Helps
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