List of Financial Market Terms

In Options Trading, a Call is known as a contract giving the owner the choice to buy a predetermined amount of a stock at a predetermined price (strike price) and time.

When a Trader buys a Call option, they are Bullish on the stock.  Being long a Call gives the Trader a risk of initial investment and reward of theoretically unlimited gains.  Trader's also go short Call options as an income strategy, or as a way to hedge against too much long side exposure in a portfolio. 

Take a look at the interactive risk plot profile below to get a feel for how a Long Call looks from a profit.loss perspective.

Related terms: Put Option, Vertical Spread, Iron Condor, Calendar Spread, Rho, CBOE, Implied Volatility, What is an Option?

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