What is Call Option?

Call option is used by traders to take advantage of the price movements of the underlying assets. The call option premium rises with the rise in the market price of the underlying asset and vice versa.

There are two types of call option strategies, long call and short call.

Long call position is taken by buyers who speculate that the price of a stock will appreciate.

Short call is employed by sellers who speculate that the price of the underlying stock will depreciate or would remain constant below a particular price. This short-selling position indicates a bearish perspective on the market.