   3: The Long Call Strategy Strategy: Long call Opening the Trade: "Buy to open" a call option Closing the Trade: 1. "Sell to close" a call option with the same strike and expiration 2. Let it expire worthless 3. Exercise it Summary: This is equivalent to purchasing a stock (based on the risks and rewards) except you have a lot less capital at risk. You think the stock price will rise, so you buy a call option on it. You are hoping the option price will increase, so you can sell it. Or exercise it near expiration to buy the stock at less than current market price. No margin is required to buy call options. You usually MUST tell your broker you wish to exercise an option BEFORE a set time on the third Friday of the month of expiration, or else you risk having an option worth hundreds or thousands of dollars expire worthless. I've heard people complain their brokers didn't automatically exercise their in the money option. Don't let it happen to you. Maximum Profit: Unlimited. Maximum Loss: The premium paid. Breakeven: You lose money on this trade if the stock price is below the strike price plus the premium paid on expiration day.  Figure 1: Buy 1 NOV 60 CALL on XYZ Example:
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