Long Call

Psychology:

The buying of calls (long) is typically done when you are bullish on market direction and the stocks direction. A long call is simply the purchase of a call option. A long call option is one of the simplest ways to benefit in an upward move of a stock and is the most common choice among first time investors. Being long a call option means that we will benefit if the stock climbs, in addition, risk is limited on the downside if the market makes a correction. As the stock price rises the call price will rise as well.

Risk / Reward:

Maximum Loss: Limited to the premium paid up front for the option.

Maximum Gain: Unlimited as the market rallies.