What is a Call Option?

What is a call option?

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A call option is the right, but not the obligation, to buy an asset at an agreed upon price on or before a particular date.

Call options are used in partnership flips, which are a useful element of tax equity financing in renewable energy investments.

A call option is the opposite of a “put option”. A put option is the right, but not the obligation, to sell an asset at an agreed upon price on or before a particular date.