Call Option: understand the right to share purchase options

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The options market is an investment alternative made up of different types of contracts, the call option being one of them. This agreement grants the right to purchase an asset without having to become an immediate owner.

Even though the exposure to risk is lower, considering the characteristic fluctuations of thevariable income, it is essential to understand how it works and carry out analysis. The values ​​of the shares are projected into the future and if the investor does not exercise the purchase right on the expiration date, they will lose the money used in the option.

In this post, we bring you everything you need to know about Brother cell phone list call options. Keep reading and see how it works, when to use it, payment methods, as well as the advantages and disadvantages of this method!

What is a call option?
Also called a purchase option, a call option is a contract that consists of purchasing the right, and not the obligation, to obtain an underlying asset. The transaction takes place at a pre-determined price and date , to fix the value of a future acquisition — examples of items negotiated in this format include shares, interest rates and commodities.



There are three types of option:

American option : can be exercised at any time, up to the expiration date;
European option : can only be exercised on the expiration date;
Asian option : the value at expiration does not depend on the price of the underlying asset at the time, but on the average price over a given period.
What is the difference between call option and put option?
While the call option gives the investor the right to buy the share and not the share itself, the put option , or put option, guarantees the right to sell that same asset.

The mutual objective is to freeze the share price for the near future, however, the purpose is divided into buying and selling within the characteristics of the options market.

How does the call option work?
A call option is a derivative contract , that is, a financial instrument that gives the investor the right to buy a certain asset in the future. It works by setting a price in the present so that it is the basis for future trading regardless of market fluctuations.

Imagine a practical example in which an investor, with the intention of joining a company, can use the call option as an alternative to not making an immediate and definitive decision. Therefore, the purchase option is a way of avoiding contractual changes and leaving the transfer of shares or quotas for the future.

When can call options be used?
The call option is usually used when an investor assesses that a certain asset has good appreciation potential . In this way, it guarantees the possibility of purchasing it at a lower price, fixed before the actual price of the product rises, whether financial or not.

At B3, options contracts, in European and American format, are traded every month, with the expiration date being the third Friday of each month.