One thought on “Why take a long position in options?

  1. Arti says:

    It’s an opportunity to do this trade, but not a commitment — so, an option. An option is a contract that gives you the right to buy or to sell shares for a preset price (or “strike price”) on or before a future date, usually within the next nine months. In the options-trading world, taking a long position, or going long, means you’re purchasing an option. You don’t have to buy the stock (in a call) or sell the stock (in a put) unless you expect to profit — by the shares moving as you anticipated before the contract ends. Going long lets you take chances with less risk. Both long calls and long puts limit your loss to the premium, the cost of the options contract.

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