call option

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Related to Call provisions: Call protection, Call feature

Call option

An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.

Call Option

An option contract in which the holder has the right (but not the obligation) to buy the underlying asset at an agreed-upon price on or before the expiration date of the contract, regardless of the prevailing market price of the underlying asset. One buys a call option if one believes the price for the underlying asset will rise by the end of the contract. If the price does rise, the holder may buy and resell the underlying asset for a profit. If the price does not rise, the option expires and the holder's loss is limited to the price of buying the contract. Call options may be used on their own or in conjunction with put options to create an option spread in order to hedge risk.

call option

See call.

Call option.

Buying a call option gives you, as owner, the right to buy a fixed quantity of the underlying product at a specified price, called the strike price, within a specified time period.

For example, you might purchase a call option on 100 shares of a stock if you expect the stock price to increase but prefer not to tie up your investment principal by investing in the stock. If the price of the stock does go up, the call option will increase in value.

You might choose to sell your option at a profit or exercise the option and buy the shares at the strike price. But if the stock price at expiration is less than the strike price, the option will be worthless. The amount you lose, in that case, is the premium you paid to buy the option plus any brokerage fees.

In contrast, you can sell a call option, which is known as writing a call. That gives the buyer the right to buy the underlying investment from you at the strike price before the option expires. If you write a call, you are obliged to sell if the option is exercised and you are assigned to meet the call.

call option

see OPTION.

call option

see OPTION.

call option

See call provision.
References in periodicals archive ?
Finally, low tercile issuers are 4% more likely to include call provisions at issuance.
Majority of these bonds (87% of the sample) also contain another important provision: call provision. The call provision allows the firms to call the issues back at a predetermined price and time; on the other hand, it increases the possibility of loss of income to investors due to a premature redemption (Winn and Hess 1959).
Do Not Call Provisions of the Revised Telemarketing Sales Rule
They have pursued these efforts through a strategy of advance refunding: In the early l990s, when bond yields were seen as especially favorable, state and local governments issued new debt, even before call provisions on the older bonds could be exercised, and placed the proceeds in escrow accounts.
The reasons for the switch: it took so long to issue the certificates; the process was cumbersome; predicting a financing amount was difficult and cwtly (the city ended up paying interest on items never needed); call provisions were restrictive; and the state had to prorate dollar amounts per agency.
1272 is made by evaluating the call provisions of the stock and by applying IRC Sec.
* Special Features: IPO, previous LBO, flow-through shares and bought deal indicators; sinking fund info, put and call provisions, serial indicator and convertibility details
Many others are from the hotel construction boom of 1984 through 1988, written with five-seven-or ten-year call provisions.
In a theoretical paper, Banko (2003) examines call provisions under multiple agency conflicts (e.g., a firm with both information asymmetry and underinvestment problems).
Call provisions permitting the bank to accelerate payment of the loan under circumstances other than the borrower's default under the credit agreement or to mitigate the bank's exposure to loss.
Also, there are no balloons and no call provisions, and other than a small pre-payment fee for very early payment of long-term loans of more than 15 years, there are no other fees or penalties, allowing borrowers to remit more than their monthly payment to pay down their loan either a bit or a chunk at a time.