Buying or “Going Long” on a Call is a strategy that must be devised when the investor is bullish on the market direction moving up in the short term.A Long Call Option is the simplest way to benefit if the investor believes that the market will make an upward move. It is the most common choice among first-time investors. “Being Long” on a Call Option means the investor will benefit if the underlying Stock/Index rallies. However, the risk is limited on the downside if the underlying Stock/Index makes a correction.
Investor View: Bullish on the Stock / Index.
Risk: Limited to the premium paid.
Breakeven: Strike Price + premium paid.
Illustration E.g Nifty is currently trading @ 5500. Investor is expecting the markets to rise from these levels. So buying Call Option of Nifty having Strike 5500 @ premium 50 will benefit the investor when Nifty goes above 5550.