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A financial contract that gives the buyer the right, but not the obligation, to purchase an underlying asset at a specified strike price before a certain expiration date.
Buying a call option is a bullish bet. If you buy a call on stock XYZ with a $50 strike price for a $3 premium, you profit if the stock rises above $53 (the strike plus the premium paid). Your maximum loss is limited to the $3 premium. Call options provide leverage because a small investment can control a much larger position. For example, one contract controls 100 shares, so a $300 premium gives you exposure to $5,000 worth of stock. Selling (writing) calls generates income but caps your upside.