- About
- Introduction
- How to read graphs
- Call Option
- Put Option
- Volatility
- Intrinsic Value
- Extrinsic Value
- Greeks
- Delta
- Delta neutral
- Gamma
- Vega
- Theta
- Charm
- European vs American
- Binary Option
- Naked Put
- Naked Call
- Covered Put
- Covered Call
- Option Strategies
- Collar
- Horizontal Spreads
- Vertical Spreads
- Bull Call Spread
- Bear Call Spread
- Bull Calendar Spread
- Bull Put Spread
- Bear Calendar Spread
- Diagonal Call Spread
- Diagonal Put Spread
- Long Straddle
- Short Straddle
- Long Strangle
- Short Strangle
- Long Butterfly
- Short Butterfly
- Long Condor
- Long Iron Condor
- Double Diagonal
- Synthetic spot
- Reversal
- Box
- Ratio Put Spread
- Ratio Call Spread
- Jade Lizard
- Binomial model precision
- Volatility Skew
- Variance Swap
A call option gives its holder the right, but not the obligation, to buy a certain instrument (like a stock or a future), called the underlier or the base contract on or before a certain expiry date at a certain strike price.
If you hold a position in a Call, your potential loss is limited to the price you paid for the option, so called option premium, but your potential profit is unlimited, the higher the base contract trades, the more profit you can get on the expiration date. The profit you get is calculated as base price - strike price or zero if the base price is lower than the strike.
See also european vs american options, put option.
Want to learn more? Download now an interactive reference application for iPhone.
The screenshot shows the following portfolio:
Volume | Instrument |
|---|---|
1 | European call struck at 10.000 with expiry in 30 days |
This is an excerpt from iOptioneer option trading reference application. In order to build the real-time dynamic strategy graph and run simulations you will need to download the application from App Store.