Construction: Buy 1 call option.
When To Use: When you feel the price of the underlying stock will increase by at least the cost of premium paid by the options expiration date.
Breakeven: The call options strike price plus the cost of the premium paid.
Max Gain: The maximum gain for a call option is unlimited.
Max Loss: The strategy incurs losses when the call option closes below the buyers’ breakeven point (the options strike price plus the cost of premium).
Key Concepts: A Long Call is a bullish, single-option strategy that gives the buyer the right (but not the obligation) to purchase 100 shares of the underlying stock on or before the options expiration date.
Example: Long the $100 strike call for a net debit of $5.00. The breakeven is the stock price closing at $105 by expiration. The stock must close above $105 at expiration to be profitable.