Derivatives
What is Call Option?
A call option gives the buyer the right (but not the obligation) to buy an asset at a predetermined price before a specific date, used for bullish bets and hedging.
Formula
Call Payoff = max(0, Stock Price at Expiry - Strike Price) - Premium Paid
How to Interpret
Buying calls is a leveraged bullish bet with limited downside (you only lose the premium). Selling calls generates income but has unlimited risk if the stock surges.
Typical Ranges
In US markets, SPX/SPY (S&P 500), QQQ (Nasdaq-100), and single-name tech (AAPL, NVDA, TSLA) options dominate volume, monthly and weekly expiries available. Or international markets like India: Nifty and Bank Nifty options are most liquid, with weekly expiries dominating.