What Is a Call Option, and How Does It Relate to Speculating on Cryptocurrency Price Movements?

A call option is a financial derivative contract that gives the holder the right, but not the obligation, to buy an underlying asset at a specified price, called the strike price, on or before a certain date. In crypto, a call option allows a speculator to bet on the price of a cryptocurrency increasing.

If the price rises above the strike price plus the premium paid, the option holder profits by exercising the right to buy low and sell high. It provides leveraged exposure.