call investment & finance definition
The
right, but not the obligation, to sell a security at a predetermined price.
See call in Wall Street Words
- An option that permits its holder to purchase a specific asset at a predetermined price until a certain date. For example, an investor may purchase a call option on General Electric stock that confers the right to buy 100 shares at $25 per share until October 17. Calls are sold for a fee by other investors, who incur an obligation. Also called call option. Compare put 1. See also synthetic call.
- An issuer's right to repurchase an issue of bonds at a predetermined price before maturity. The feature is used when interest rates fall, so that the bonds can be repurchased and a new, lower-rate issue sold. A call feature is normal for nearly all long-term bond issues, and it operates to the detriment of bond owners. See also call price, cleanup call, extraordinary call, optional call, sinking fund call.
- Redemption of an issue of bonds before maturity by forcing the bondholders to sell at the call price.
To force an option writer to sell shares of stock at a price stipulated in a contract. Stocks usually are called just before the expiration of the options.
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