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Call option
An agreement which gives the recipient the right, but not the obligation, to require the donor to transfer a specified asset to the recipient, normally at a specified price, on a specified date (or within a range of dates).
The recipient of this right can be expected to exercise it if the value of the asset, on the date on which the option may be exercised, is higher than the price at which the option can be exercised.
It therefore gives the recipient an option to participate in any increase in price of the relevant asset.
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