Long Call - At a Glance

Strategy

• Long Call

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Alternative Name

• n/a

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Pre-Requisite Strategy Knowledge

• Long Stock

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Legs of Trade

• 1 leg
• Buy 1 XYZ call

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Sentiment

• Bullish

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Example

• Long 10 XYZ January 50 calls for $1.25, plus fees and commissions

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Rule to Remember

• n/a

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Max Potential Profit (GAIN)

• Unlimited

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Break-Even Point

• The breakeven point occurs when XYZ stock price is trading equal to the strike price plus the net premium paid.

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Max Potential Risk (LOSS)

• Net Premium Paid (debit)

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Ideal Outcome

• XYZ price rises significantly above the strike price plus net premium paid

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Margin Requirement

• No

Early Assignment Risk

• Early assignment risk applies to short options positions only.
• Long options have no risk of early assignment.

Chart

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