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.
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Cached on May 24, 2012, 1:40 am