Long Call
Investor use long call when he is bullish about market. A long call is simply the purchase of one call option.
Market Scenario: Bullish
Risk: Limited
Reward: Unlimited
BEP: Call Strike + Premium
EXAMPLE:
Entry:
SPOT
|
5000
|
Strike
|
Premium
| |
LONG CALL
|
5100
|
50
|
BEP = 5100 + 50 = 5150
On Exit if:
SPOT
|
CALL PAY-OFF
|
PREMIUM
|
STRATEGY PAY-OFF
|
4800
|
0
|
-50
|
-50
|
4900
|
0
|
-50
|
-50
|
5000
|
0
|
-50
|
-50
|
5100
|
0
|
-50
|
-50
|
5150
|
50
|
-50
|
0
|
5200
|
100
|
-50
|
50
|
5300
|
200
|
-50
|
150
|
5400
|
300
|
-50
|
250
|
5500
|
400
|
-50
|
350
|
Strategy Pay-Off
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