Call Option – this is an option that gives the holder the right, but not the obligation, to buy the base instrument at a specified price, called strike price, on or before the defined date. This is a financial contract between the buyer and the seller. The buyer could buy an agreed amount of a particular commodity or instrument from the seller of this option at a certain time, which is called the expiration date. Analogically, the seller is obligated to sell them according to the buyer’s preference. In order to have this right, the buyer pays a premium.
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