Home » Education » Basic Option Tutorial » Buy Call
The purchase of a call is the most basic of option strategies. It provides the right, without the obligation to own a
future at a designated strike price. Because a premium is paid the futures market will have to move higher in order for there to
be profit possibly realized at expiration. It is a bullish directional strategy with limited risk/unlimited reward.
Breakeven point is when future price = strike price + premium paid
Maximum loss = premium paid
Maximum profit = unlimited only to the extent the futres market can move.
- In The Money: Strike price less than futures price.
- At The Money: Strike price at/or near futures price.
- Out Of The Money: Strike price greater than future price.
- Delta is positive. Higher prices help.
- Vega is positive. Higher implied volatility helps.
- Theta is negative. The passage of time hurts.
