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Derivative Markets

A call gives its buyer the right to buy at the strike. Profit at expiry subtracts the premium.

Your starting point

Markets, Investments and Risk

Can a call option finish in the money and still lose money? The expiry payoff is zero below the strike and rises one-for-one with spot above it. Profit also reflects premium and, in full models, financing and transaction costs.

Call option payoffFoundation · Quick, Deep, ApplyProtect a share position with a putIntermediate · Quick, Deep, ApplyPrerequisite · Expected value

Use the linked prerequisite and related topics to build your path.