Long Call
Components
A long call is simply the purchase of one call option.
Risk / Reward
Maximum Loss: Limited to the premium paid up front for the option.
Maximum Gain: Unlimited as the market rallies.
Characteristics
When to use: When you are bullish on market direction and also bullish on market volatility.
A long call option is the simplest way to benefit if you believe that the market will make an upward move and is the most common choice among first time investors.
Being long a call option means that you will benefit if the stock/future rallies, however, you risk is limited on the downside if the market makes a correction.
From the above graph you can see that if the stock/future is below the strike price at expiration, your only loss will be the premium paid for the option. Even if the stock goes into liquidation, you will never lose more than the option premium that you paid initially at the trade date.
Not only will your losses be limited on the downside, you will still benefit infinitely if the market stages a strong rally. A long call has unlimited profit potential on the upside.
Are you long all 3? I.e. long the call, the put and the future? If so, your position is synthetically the same as a long call with a breakeven point at 4693.
If you're very bullish on the Nifty, you may as well hold onto the position as you are long delta and the current position will benefit from the market rising.
However, you might also want to look at selling 2 call options around the 4700 strike level. You will cap your upside potential somewhat, but lower your breakeven and also your downside losses if the market falls.
A "long stock" position is simply when you've bought shares in an underlying asset. A long call option is different to a stock position in that a call option has limited risk. A long stock has a profile that looks the same as a long synthetic;
http://www.optiontradingtips.com/strategies/long-synthetic.h tml
can you tell me what is a long stock and how is it different from long call?