Call Option

A call option gives the holder the right, but not the obligation, to purchase property at a predetermined price within a specified timeframe.


ElementDescription
Option feePayment for right to purchase
Strike pricePredetermined purchase price
Exercise periodTimeframe to decide
Non-refundableFee typically not returned
No obligationCan choose not to purchase
Strategic UseApplication
Market timingLock price while evaluating
Development contingencySecure site for future project
Portfolio planningControl asset without capital commitment
Risk managementLimit downside to option fee

Related Terms

Put OptionOption to PurchasePre-Emption RightFirst Right of Refusal

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