Call Option

This Issue in United States

Call Option

Concept of Call Option in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An option (i.e. the right to buy or sell a financial instrument at some agreed conditions) which gives the buyer (holder) the right but not the obligation to buy a specified asset on or before a specified date. For physical settlement, the seller (writer) of the option has the obligation to deliver the underlying asset, at the strike price, if the buyer exercises the option. For cash settlement, the seller compensates the buyer for the difference between the underlying price at exercise and the strike price.

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See Also

• Derivatives Contract