WHAT ARE CALL OPTIONS?

Call option is a type of derivative that has its own benefits. Call options can be tough to understand, especially for beginners. But now you don’t have to worry. Learn the basics of Derivative – Call Options with Angel One. Presenting fun-to-learn 60sec videos by Angel One, to help beginners grasp the basics of equity & share-trading. Call option is an effective means to leverage your capital for greater investment returns.

Here’s an easy explanation of how it works.

Transcript :

what are call options meet Asia and Ashish RJ believes the shares of ABC Mobile’s currently priced at rupees 300 is going to rise Ashish who owns some shares of ABC Mobile’s is expecting the price to fall so Ashish agrees to sell his shares to a Jay for rupees 3 20 inch in a month’s time they signed the contract of call option by which a Jay gains the right to buy an Ashish becomes obligated to sell the shares at the agreed price on the set date the feed that RJ baya sheets for the option called premium is rupees 20 per share if the share price shoots up to peas 400 in a month RJ can use the option and earn a profit of rupees 60 after deducting the rupees 20 he has paid as premium if the price is lower than rupees 320 the nahji loses the rupees 20 he paid for the option call options offer investors waiting to leverage their capital for greater investment returns [Music]