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Answer this NISM Series VIII sample question

NISM Series VIII - Equity Derivatives - Question 1 of 5
Which of the following best describes a 'Call Option' in equity derivatives?
A
The right to sell a security at a predetermined price before expiry
B
The right to buy a security at a predetermined price before expiry
C
An obligation to sell a security at market price on expiry
D
A futures contract with daily settlement
Correct! Here's why:
A Call Option gives the buyer the RIGHT (not obligation) to BUY the underlying asset at the strike price before or on the expiry date. The buyer pays a premium for this right. If the market price goes above the strike price, the buyer exercises the option to profit.

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