23-50 Giving the purchaser the right to buy the underlying security at a prespecified price is a

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Giving the purchaser the right to buy the underlying security at a prespecified price is a call option. A put option would give the purchaser the right to sell the underlying security at a prespecified price. A naked option refers to an option that has not been hedged. A futures option is an option on a futures contract. A credit spread call option is a more specific type of option strategy that involves selling a call option with a higher strike price and buying a call option with a lower strike price, to create a credit spread.

23-50 Giving the Purchaser the Right to Buy the Underlying