An option contract that conveys the right, but not the obligation, for the Option Holder to buy a specified number of shares of a security or a futures contract at a specified price, and within a specified period of time. Options traders purchase call options when they believe the price of a security is going to increase because it allows them to lock in their purchase price at the lower, current level. If the price goes down instead of up, the trader's loss is limited to the cost of the option contract. Often referred to simply as a Call. Compare to Put Option. See expiration date.
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put call parity
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