What "call option" means in finance

A call option is a type of financial contract that gives the holder the right, but not the obligation, to purchase a specific underlying asset at a predetermined price (strike price) within a specified period of time. The underlying asset can be a stock, commodity, or any other asset. A call option is usually bought when the buyer expects the price of the underlying asset to rise. If the price does increase, the buyer can exercise the option and buy the asset at the lower strike price, selling it at the higher market price for a profit. However, if the price does not increase, the buyer can choose not to exercise the option, letting it expire worthless.