What is a call option?
A call option is a contract that gives the buyer the right but not the obligation to buy a specific asset at a specific price, on a specific date of expiry. The value of a call option appreciates if the asset's market price increases.
The seller, also known as the writer, has the obligation to sell the underlying asset – at the agreed upon price, called the strike price – if the option is executed by the buyer, also known as the holder. The seller is paid a premium for accepting the risks associated with the obligation to sell.