When you purchase a call, you're committing to acquire a stock or asset at a predetermined price by a certain date. The same considerations apply to call options as to put options. You might consider a call option if you believe the asset's price will rise before it expires. Let's say you bought a call option on 100 shares of ABC stock to see the company's value rise. If you own a call option contract, you can purchase shares at $50 each. The stock price is now $100 per share. You can use a call option contract to get a discount on that stock.

Buying a call is purchasing the right to purchase the underlying security at the strike price. The buyer pays a premium for this option, which is essentially insurance that they can own the stock at the strike price if it goes above that. This strategy is often used to hedge an existing position or take advantage of an anticipated increase in price due to an upcoming event.

One of the ways to invest for retirement or other long-term goals is by buying call options on stocks that align with your investment horizon. One type of option is a call, which allows you to buy a specific amount of an underlying stock at a specified price, called the strike price, up until the expiration date.