InsiderFlow › Glossary › What is a call option?
A call is the option granting the right to buy a security at a fixed price: the quintessential bullish bet.
You buy a call when you expect the stock to rise above the strike before expiry. Potential gain is unlimited, maximum loss is the premium paid. It's the favorite form of bullish leverage among US retail traders.
Whoever sells ("writes") a call collects the premium and bets the stock won't rise: if they already own the shares it's a covered call, an income strategy considered conservative.
On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.
When you expect a strong, fast rally: time works against you, as the option loses value daily.
Selling calls on shares you already own: you collect the premium but give up gains above the strike.