What Does It Mean To Buy A Call at Buying

What Does It Mean To Buy A Call. An issuer can exercise it, but doesn’t have to. A calendar or horizontal call spread is created when you buy long term call options and sell near term call options.

The buyer of a call option must pay a premium for the privilege of having the choice to buy the security at a predetermined “strike price” on or before a specific date. When you buy a call option, you’re buying the right, but not the obligation, to purchase a certain amount of a stock (or another asset) for a certain price by a certain time. If you’re trading options, you’re basically trading two types.

A call option strike price is the price at which the holder of the call option can exercise, or buy, the underlying stock. A margin call often means that your investments haven’t gone the way you wanted them to. For example, if apple is at $600 and you think apple is going up, then you might by the apple july $610 call. If the buyer of an option does exercise his right, then the option seller, who is known as the option writer, is obligated to fulfill the terms of the option contract.