Call Option

A call option is a contract that gives you the right—but not the obligation—to buy a stock at a set price by a specific date. Think of it as a reservation: you pay a small upfront fee (called the premium) to lock in a purchase price, betting the stock will rise. If it does, you profit. If it doesn't, you simply walk away and lose only your premium. You'll encounter call options when exploring ways to amplify returns or hedge against risk. For example, you might buy a call option on TechCorp stock at $50, betting it'll climb above $55 within three months. Call options let smaller investors control more stock with less money upfront, but they're riskier than owning shares directly.