Call Option

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DEFINITION of 'Call Option'

An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

INVESTOPEDIA EXPLAINS 'Call Option'

It may help you to remember that a call option gives you the right to "call in" (buy) an asset. You profit on a call when the underlying asset increases in price.

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