Part 4 Learn Institutional Trading

Call Options Explained

A call option gives the buyer the right to purchase the underlying asset at the strike price. Buyers of calls are bullish, expecting the price to rise. Sellers (writers) of calls are bearish or neutral, expecting the price to stay below the strike.

Example:
You buy a Reliance Industries call option with a strike price of ₹2,400, paying a premium of ₹50.

If Reliance rises to ₹2,500, your option is worth ₹100 (₹2,500 - ₹2,400).

Your profit = ₹100 - ₹50 = ₹50 per share.

If the stock remains below ₹2,400, you lose the ₹50 premium.

Call options are often used to participate in upward moves without committing large amounts of capital.