Long Call Strategy
Buy a call option to profit from bullish price movement with limited risk.
Unlimited (stock can rise indefinitely)
Premium paid
Strike price + premium paid
bullish
📖 What is the Long Call?
A long call is the most basic bullish options strategy. You purchase a call option, giving you the right to buy 100 shares at the strike price before expiration. Your maximum loss is limited to the premium paid, while profit potential is theoretically unlimited as the stock rises. This strategy offers leveraged upside exposure with defined risk.
🔧 How to Set Up
BUY CALL @ ATM or OTM
Buy to open a call option at your chosen strike price
💡 Example Trade
Underlying: AAPL @ $175
Buy 1 AAPL $180 call expiring in 30 days for $3.50
Unlimited above $183.50
$350 (premium paid)
$183.50 ($180 strike + $3.50 premium)
📊 Greeks Profile
Positive (0.3-0.7 typically). Profits as stock rises.
Positive. Delta increases as stock rises.
Negative. Time decay works against you.
Positive. Benefits from rising implied volatility.
❓ Frequently Asked Questions
When should I buy a long call?
Buy long calls when you're bullish on a stock and expect a significant move before expiration. They're best when IV is low (cheap options) and you want leveraged upside with limited downside.
How much can I lose on a long call?
Your maximum loss is the premium paid for the option. If the stock stays below the strike price at expiration, you lose 100% of your investment.
Pros & Cons
- ✓Limited and defined risk (premium paid)
- ✓Unlimited profit potential
- ✓Leveraged exposure - control 100 shares for fraction of cost
- ✓Simple to understand and execute
- ✗Loses value from time decay (theta)
- ✗Can lose entire investment if stock doesn't move enough
- ✗IV crush can hurt even if direction is correct
- ✗Requires significant move to be profitable
Ideal Conditions
- →Strong bullish outlook on the underlying
- →Expecting a significant move before expiration
- →Implied volatility is relatively low (cheap options)
- →Want leveraged exposure with limited downside
💡 Pro Tips
- Choose expiration that gives your thesis time to play out
- Consider ITM calls for higher probability but more cost
- Watch implied volatility - avoid buying when IV is elevated
- Have an exit plan before entering the trade