A type of equity security (share) that gives the issuer (the company issuing the share) the right, without the obligation, to redeem or “call” the share at a pre-specified price prior to a specified date (i.e., during a set call period).

This share is embedded with a call option (embedded call option) that allows the issuer to buy it back from the holders as per the terms specified in the issue (including call price, callability period, etc). The issuer can exercise the embedded option during a set period of time, after which the right lapses.

A callable share may take the form of a callable preferred share– which is a type of preferred share that the issuer has the right to call in or redeem at a pre-set price after a defined date. In its simple form, this share may be a callable common share– that is a common share an issuer can call away from a shareholder at a premium to the then prevailing market price or as per a schedule of prices announced at the time the common share is issued.