Long call
Also known as: long call option
A long call is the options position created by buying a call option, which gives the holder the right to buy the underlying stock at the strike price before expiration. It is a bullish strategy with limited risk and unlimited profit potential.
A long call is simply a purchased call option. The buyer pays a premium for the right — not the obligation — to buy 100 shares of the underlying stock at the strike price any time before the option expires. Investors go long calls when they expect the stock price to rise.
Here's how the numbers work. Suppose you buy one ABC Jan $50 call at a premium of $3, paying $300 (each contract covers 100 shares). Your breakeven is the strike plus the premium: $53. If ABC climbs to $60, you can exercise and buy at $50 — or sell the option — for a $700 gain. If ABC finishes at or below $50 at expiration, the call expires worthless and you lose only the $300 premium.
The risk profile makes long calls attractive: maximum loss is limited to the premium paid, while maximum gain is theoretically unlimited because there is no ceiling on how high a stock can rise. Long calls provide leveraged bullish exposure with far less capital than buying the shares outright, and they can also hedge a short stock position against a rising market.
The SIE, Series 65, and Series 9 exams all test long calls — know the maximum gain, maximum loss, and breakeven formulas cold, since long calls are also the building blocks of more advanced strategies like straddles and call spreads.
Key takeaways
- A long call is a purchased call option — the right to buy 100 shares at the strike price before expiration.
- It is a bullish position: the buyer profits when the stock rises above the breakeven.
- Maximum loss is the premium paid; maximum gain is unlimited.
- Breakeven equals the strike price plus the premium.