Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Call Over

What it is:

The phrase call over is used to describe the exercising of a call option.

How it works (Example):

A call option gives its owner the right to buy an asset at a set price (the strike price) on or before a certain day (the expiration date). If you own a call option on 100 shares of Company ABC stock with a strike price of $25 per share, you will call over the shares of stock once the stock price exceeds $25.  

Why it Matters:

The decision to call over a stock is 100% dependent on the price of the underlying asset. In our example above, the investor will call over the stock when the price is above $25, but will allow the call option to expire if the price never reaches that level.