A long call gives you the right to buy a stock at a fixed price before expiration. Your risk is limited to what you pay. Your upside is not.
When you buy a call option, you're paying a premium for the right — but not the obligation — to purchase 100 shares of a stock at a specific price (the strike price) before a specific date (the expiration). If the stock rises above your strike price by more than you paid for the option, you profit. If it doesn't, you lose the premium. That's the entire downside.
This makes a long call a directional bet that the stock will go up. Compared to buying the stock outright, you're risking much less money for a similar exposure to the upside.
Maximum profit: Unlimited. The stock can rise indefinitely, and your call option gains dollar-for-dollar above the strike price.
Maximum loss: The premium you paid. In the example above, $300. This is your total risk regardless of how far the stock falls.
Breakeven at expiration: Strike price + premium paid. In the example: $105 + $3.00 = $108.00.
A long call works best when you expect the stock to rise meaningfully before expiration. Time decay works against you — the option loses value every day the stock doesn't move. It also works well when implied volatility is relatively low, since high IV means you're overpaying for the option.
New to call options? Read our guide →