A call option allows an investor to pay a fixed premium for the right, but not the obligation, to buy an asset at a predetermined price until expiration. The Long Call strategy might be useful for an investor who is bullish on either the market or the price of a specific stock. Investors going long calls may profit if the price of the underlying shares rises above the combined value of the strike price and the net cost of the option. The payoff from a long call position is unlimited, increasing point for point with the stock if the price of the underlying shares move higher. The loss potential is limited to the initial cost of the option.
