An option to buy assets at an agreed price on or before a particular date.
- A call option that gives you the right to acquire 100 shares of Microsoft at $50 for the next three months costs about $550.
- By buying a call option, the investor is again making a bet that the underlying stock will be trading at a price higher than current market prices, so they're locking in the ability to buy at a cheaper rate.
- The call option allows you to control the same 100 shares for substantially less than it cost to purchase the stock outright.
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