A long call is an options trading strategy that involves purchasing a call option with the expectation of profiting from a potential increase in the price of the underlying asset. This strategy allows the investor to benefit from price appreciation while limiting the potential loss to the premium paid for the call option.
By purchasing a call option, the investor gains the right, but not the obligation, to buy the underlying asset at a predetermined price (strike price) within a specified period (until expiration). If the market price of the asset rises above the strike price before the option expires, the long call holder can exercise the option and buy the asset at the lower strike price, thus profiting from the price difference. However, if the asset’s price does not increase or falls below the strike price, the investor’s loss is limited to the premium paid for the call option.
To know what is a short call click here What is short call?