A
call option, often simply labeled a "call", is a financial contract between two parties, the buyer and the seller of this type of
option. The buyer of the call option has the
right, but not the obligation, to buy an agreed quantity of a particular
commodity or
financial instrument (the
underlying) from the seller of the option at a certain time (the expiration date) for a certain price (the
strike price). The seller (or "writer") is obligated to sell the commodity or financial instrument to the buyer if the buyer so decides. The buyer pays a fee (called a premium) for this right.