Anticipations - Long Call
A strong, upward move in the underlying asset is anticipated.
Characteristics - Long Call
Unlimited profit / limited loss.
Max profit - unlimited.
Max loss - limited to the net debit required to establish the position.
Creating - Long Call
Buy a call option.
Example - Long Call
Security(IBM) price - $100
Long 1 IBM 100 Call - $6.5
Max profit = unlimited
Max loss = $6.5 * 100 = $650
Option Position at Expiration
Comments
Buy OTM call option if very bullish, Buy ITM call option if
less.
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