Call Option
An options contract giving the buyer the right to purchase the underlying asset at the strike price before or on expiration.
Intrinsic Value = max(0, Spot Price − Strike Price)
A call option profits when the underlying rises above the strike price. The buyer pays a premium to control 100 shares (standard US equity option) without owning them outright.
At expiration, the call has intrinsic value of max(0, Spot − Strike). If the underlying is below the strike, the call expires worthless and the buyer's total loss equals the premium paid.
Calls are used to express bullish directional views, hedge short positions, or construct multi-leg strategies like spreads and condors.
On the desk
You buy a 30-day TSLA $250 call for $5.00 ($500 total). At expiry TSLA trades at $268. The call is worth $18 intrinsically; your profit is $1,300 on $500 risked.