Strategy reference
Long Call
A long call is the simplest bullish options position: you pay a premium up front for the right to buy a stock at a fixed strike price before the option expires.
Structure
You buy one call option contract. Each standard contract represents 100 shares of the underlying stock. Your only cost is the premium you pay; you have no further obligation.
Payoff at expiration
At expiration, you profit dollar-for-dollar once the stock finishes above the strike by more than the premium you paid. Your maximum loss is the premium itself, which happens any time the stock finishes at or below the strike. Profit is theoretically unlimited as the stock rises.
- Stock price
- $100
- Buy
- 1 × $100 call @ $3.50
- Net cost (debit)
- $3.50
- Max gain
- Unlimited above $103.50
- Max loss
- $3.50 (the premium) at S ≤ $100
- Breakeven
- $103.50
Frequently asked questions
What is a long call option?
A long call gives you the right — but not the obligation — to buy a stock at a fixed strike price before expiration. You pay a premium up front and profit if the stock rises above the strike by more than the premium paid.
What is the maximum loss on a long call?
The maximum loss on a long call is the premium you paid for the option. That loss occurs at any expiration price at or below the strike.
How do you calculate breakeven on a long call?
Breakeven for a long call equals the strike price plus the premium paid. Above that price, the position is profitable at expiration.
This page is an educational reference, not investment advice. Numbers in the worked example are approximations for illustration only — real option prices depend on volatility, interest rates, dividends, and time to expiration. See the full disclaimer for details.