Call Option definition
Call options are financial contracts that give the option buyer the right but not the obligation to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period.

The stock, bond, or commodity is called the underlying asset. A call buyer profits when the underlying asset increases in price.

For example, a single call option contract may give a holder the right to buy 100 shares of Apple stock at $100 up until the expiration date three months later. There are many expiration dates and strike prices that traders can choose. As the value of Apple stock goes up, the price of the option contract goes up, and vice versa.

The payoff of a call option at expiration
The call option buyer may hold the contract until the expiration date, at which point they can take delivery of the 100 shares of stock or sell the options contract at any point before the expiration date at the market price of the contract at that time.
You pay a fee to purchase a call option, called the premium. It is the price paid for the rights that the call option provides. If at expiration the underlying asset is below the strike price, the call buyer loses the premium paid.

This is the maximum loss. If the underlying asset's current market price is above the strike price at expiration, the profit is the difference in prices, minus the premium. This sum is then multiplied by how many shares the option buyer controls.

For example, if Apple is trading at $180 at expiry, the option contract strike price is $170, and the options cost the buyer $2 per share, the profit is $180 - ($170 +$2) = $8. If the buyer bought one options contract, their profit equates to $800 ($8 x 100 shares); the profit would be $1,600 if they bought two contracts ($8 x 200).

Now, if at expiration Apple is trading below $170, obviously the buyer won't exercise the option to buy the shares at $180 apiece, and the option expires worthless. The buyer loses $2 per share, or $200, for each contract they bought—but that's all.
That's the beauty of options: You're only out the premium if you decide not to play.

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