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Options Strategies
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Long Call
| Strategies |
Long Call |
| Component |
Buy call |
| Potential Profit |
- When the stock price/index level is above the break-even point
- Unlimited, equals to the prevailing stock price/index level minus break-even point
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| Maximum Loss |
Total premium paid |
| Time Value Impact |
Negative |
| Break-even |
Strike price/level plus premium paid |
Example
| Component |
Buy ABC June $200 Call |
| Net Premium |
Pay $20 |
| Break-even |
$200+$20=$220 |
| Profit when |
Stock price is above $220 |
| Potential Profit |
Stock price - $220 |
| Potential Loss |
$20 |
| Time Value Impact |
Negative |
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