Call option

Resource type: Glossary item

Status: Maintained

Jurisdiction: United Kingdom

A type of option (www.practicallaw.com/A36577) which grants a right (but not an obligation) for a potential buyer to acquire an asset from a seller at a specified price (or a price to be calculated in accordance with a pre-agreed formula). The option is generally exercisable during a specified period. Call options can be used in joint ventures (www.practicallaw.com/A35536) as a method of resolving deadlock (www.practicallaw.com/A34799) situations. For example, if A has a call option enforceable against B, A can require B to sell B’s shares to him.

See Standard document, Call option agreement (www.practicallaw.com/4-201-2438) and Drafting note, Call option agreement (www.practicallaw.com/9-201-2662).

For an overview on options, see PLC Finance, Practice note, Derivatives: overview: Option (www.practicallaw.com/8-385-8330).

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  • Resource ID: 9-107-5844
  • Products:  PLC Glossary, PLC Magazine (UK), PLC UK Commercial, PLC UK Construction, PLC UK Corporate, PLC UK Dispute Resolution, PLC UK Employment, PLC UK Environment, PLC UK Finance, PLC UK Law Department, PLC UK Pensions, PLC UK Property, PLC UK Public Sector, PLC UK Restructuring and Insolvency, PLC UK Share Schemes & Incentives
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Topics
  • Joint VenturesJoint Ventures (http://environment.p01del.practicallaw.com/8-103-1308)
Practice note: overview
Practice notes
Standard documents
Drafting note
Glossary
  • Deadlock Deadlock (http://crossborder.practicallaw.com/topic1-107-6041)
  • Dealing Dealing (http://crossborder.practicallaw.com/topic9-107-6042)
  • Joint venture Joint venture (http://crossborder.practicallaw.com/topic6-107-6312)
  • Option Option (http://crossborder.practicallaw.com/topic0-107-6937)
  • Option holder Option holder (http://crossborder.practicallaw.com/topic8-107-6938)
  • Out of the money Out of the money (http://crossborder.practicallaw.com/topic5-107-6949)
  • Put option Put option (http://crossborder.practicallaw.com/topic3-107-7087)
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