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Call option

The right to buy at the strike price. It gains value as the underlying rises, and it expires worthless if the underlying never gets there.

Updated 2026-09-05

A call gives you the right to buy the underlying at the strike price until expiry. You buy one when you expect the price to rise, and you risk only the premium paid.

The appeal is leverage without borrowing. A call costing a few dollars controls a hundred shares, so a modest move in the underlying can be a large percentage move in the option. The same arithmetic runs in reverse: an underlying that goes nowhere leaves the call worthless, and going nowhere is a common outcome.

Selling a call you do not own the shares for is the one genuinely open-ended risk in retail options, because the underlying can rise without limit. Selling one against shares you hold is a covered call and is a different position entirely.

See also

  • Put option — The right to sell at the strike price. It gains value as the underlying falls, which makes it the standard way to buy insurance on a position.
  • Strike price — The price at which an option can be exercised. Its distance from the current price determines almost everything about how the option behaves.
  • Option premium — What the buyer pays the seller for the contract. It is the option's price, and it is made of exactly two things: intrinsic value and time value.
  • Covered call — Selling a call against stock you already own. You collect the premium and give up everything above the strike, which is a real trade, not free income.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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