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Long Call

Analyzing the risk profile of a long call strategy

What Happens At Expiration?

If The Call Expires ITM

If the share price is greater than your call strike at expiration, it means your call is
and you will have the right (not the obligation) to buy 100 shares at the strike price. Of course, you don't have to wait until expiration to
your option unless it is a
or
If you do, the option should be automatically exercised if it expires with
(double check with your brokerage). If the share price has risen above than your strike plus the debit you paid for the call, it will result in a net profit. If it has not risen above that point, it will be a net loss.
Figure 5 Figure 6

If The Call Expires OTM

If the share price is below than your call strike at expiration, it means the call is
and worthless. The position is a loser, but the most you can lose is the amount you paid for it.
Figure 7

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