What is a call option?

A call option gives the buyer the right, but not the obligation, to purchase the underlying asset at the agreed-upon strike price before or at the expiration date. If you buy a call option then at the end of expiry you get the right to buy the underlying security at the strike price of the option you have chosen, you can also forfeit this right by not exercising the option. The seller (writer) of the call option has the obligation to sell the underlying asset if the buyer decides to exercise the option. 

For example, if Reliance is currently trading at ₹2500 and you buy a call option with a ₹2500 strike price and a ₹100 premium, and on the expiry date, Reliance is trading at ₹2800, you can exercise the option to buy at ₹2500 from the option writer. In this case, you profit ₹200 per (₹2800 – ₹2500 – ₹100), while the option writer incurs a corresponding loss. Note that option premiums fluctuate in live markets, and traders also engage in and trades to capitalize on these changes.