# Option call put

A call optionoften simply labeled a "call", is a financial contract between two parties, the buyer and the seller of this type of option. The seller or "writer" is obligated to sell the commodity or financial instrument to the buyer if the option call put so decides.

The buyer pays a fee called a premium for option call put right. The option call put "call" comes from the fact that the owner has the right to "call the stock away" from **option call put** seller. Option values vary with the value of option call put underlying instrument over time. The price of the call contract must reflect the "likelihood" or chance of the call finishing in-the-money.

The call contract price generally will be higher when the contract has more time to expire except in cases when a significant dividend is present and when the option call put financial instrument shows more option call put. Determining this value is one of the central functions of financial mathematics.

The most common method used is the Black—Scholes formula. Importantly, the Black-Scholes formula provides an estimate of the price of European-style options.

Adjustment to Call Option: When a call option is in-the-money i. Some of them are as follows:. Similarly if the buyer is making loss on his position i.

Trading options involves a constant monitoring of the option value, which is affected by the following factors:. Moreover, the dependence of the option value to price, volatility and time is not linear — which makes the analysis even more complex.

From Wikipedia, the free encyclopedia. This article is about financial options. For call options in general, see Option law. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources.

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5 percent higher than Junes trading volume (Finance Magnates). This is an impressive figure due to the fact that leverage is not given when trading binary options, which means that 48. 73 billion JPY is the actual figure traded and not option call put due to virtual monetary leverage as applied in forex (foreign exchange markets).