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Long Call

Analyzing the risk profile of a long call strategy

Variation In Quantity

The image below shows how a long call risk profile changes when buying multiple contracts. A single call is shown as a solid gray line for comparison. In this profile, we are buying two calls instead of one. Our break even has not changed but our risk and profit potential doubles. If we were buying three contracts, our b/e would remain the same, and both our max loss and P/L rate would triple. This pattern would continue for as many contracts as we decided to buy.
Figure 4

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