Call Option (Noun)
Meaning 1
An option to buy.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The investor purchased a call option to buy 100 shares of the company's stock at $50 per share.
- The call option gave the buyer the right, but not the obligation, to purchase the underlying asset at the specified price.
- The trader sold a call option to another investor, who was hoping the stock price would rise above the strike price.
- The call option was set to expire in two weeks, at which point it would become worthless if the stock price was below the strike price.
- The company's stock price had risen significantly, making the call option a valuable asset for the investor who had purchased it.
Meaning 2
The option to buy a given stock (or stock index or commodity future) at a given price before a given date.
Classification
Nouns denoting acts or actions.
Examples
- Buying call options allows investors to purchase the underlying asset at the predetermined price if it exceeds the strike price before expiration.
- An investor bought a call option on shares of a popular tech stock in anticipation of an expected increase in the stock's price.
- To speculate on price movement or to hedge against potential losses, a company might buy call options or write put options on the commodity they use.
- He considered writing a call option on his stock but ultimately decided it wasn't worth the risk.
- Before expiration, investors holding a call option will typically either exercise their right to purchase the asset at the predetermined price or sell their call options in the open market for profit.