Call option

An option contract that gives the LONG the right to BUY an underlying asset from the SHORT at the exercise price, but no obligation to.

The SHORT is required to SELL at the exercise price, if LONG exercises the right to buy.

Value of European option (CALL) at expiration:

CT = max(0, ST-X)

ST: Spot price at expiration

X: Exercise price

Compare: Put option

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