Long Call

The simplest bullish bet — buy a call to get leveraged upside with risk capped at the premium paid.

Buying a long call is the most direct way to bet on a stock going up while capping your downside at the premium you pay.

Market outlook

Bullish — you expect a meaningful move up before expiration. Because you fight time decay, you also want the move to happen soon.

Construction

• Buy 1 call at strike $K$ for premium $P$.

Risk / reward

• Max loss: $P$ (the premium), if the stock closes at or below $K$.
• Max profit: theoretically unlimited.
• Breakeven at expiration: $\text{BE} = K + P$

When to use it

• You have a defined directional, time-bound thesis (earnings run-up, breakout, catalyst).
• You want leverage without the unlimited risk of shorting or the capital of buying shares.

Risks & management

• Theta: every day of no movement bleeds value. Prefer more time than you think you need.
• IV crush: buying before earnings means a volatility drop can lose money even if you're directionally right.
• Many traders take profits at a target or roll up, rather than holding to expiration.

Example

Stock at $100. Buy the $105 call for $2.00. Breakeven is $107. At $112 the call is worth at least $7 (a +$5 / +250% gain on the $2 paid); below $105 at expiry you lose the full $2.