call option

Formal contract between an option seller (the optioner) and an option buyer (the optionee) which gives the optionee the right but not the obligation to buy a specified contract, financial instrument, property, or security, at a specified price (called exercise price ) on or before the option's expiration date. Investors who buy call options believe the price of the underlying asset will go up, and they will be able to make a high profit from a small (marginal) investment. Opposite of put option.