What does a call option give the holder the right to do?

A call option provides the holder with the right to buy an underlying asset at a specified price, known as the strike price, within a designated timeframe. This means that if the holder anticipates that the price of the asset will rise above the strike price before the option expires, they can exercise the option and purchase the asset at the lower, predetermined price. This potential for profit arises because the holder can acquire the asset for less than its market value, enabling them to either sell it for a profit or hold it for further appreciation.

Other choices focus on different aspects of options and investment instruments. For example, the option to sell an underlying asset relates to put options, while the concept of exercising an option at any time may apply to American-style options but doesn't specifically define the unique rights associated with a call option. Finally, purchasing a derivative product doesn't accurately describe a call option's function but rather describes a broader category of financial instruments.