Call Option
Imagine you're at a casino, and the dealer offers you a tantalizing proposition: For a small fee, you can reserve the right (but not the obligation) to buy a rare gem at a predetermined price, regardless of how high its value soars in the future. Sounds like a sweet deal, doesn't it? Well, that's essentially what a call option is – a financial instrument that gives you the right to buy an asset at a specific price within a certain timeframe.