In the financial world, options come in one of two flavors: calls and puts. The way that calls and puts function is actually fairly simple. Call options grant buyers the right, not obligation, to ...

Let's take a look at an example. Suppose an investor buys a call option on XYZ stock with a strike price of $50, paying a $3 premium. If XYZ rises to $65, the option is worth $15 ($65 – $50).

Call options are a type of option that increases in value when a stock rises. They’re the best-known kind of option, and they allow the owner to lock in a price to buy a specific stock by a specific ...