Web Tutorials4u

CAPITAL MARKET

LONG IN OPTION

With respect to this booklet’s usage of the word, long describes a position (in stock and/or options) in which you have purchased and own that security in your brokerage account. For example, if you have purchased the right to buy 100 shares of a stock, and are holding that right in your account, you are long a call contract. If you have purchased the right to sell 100 shares of a stock, and are holding that right in your account, you are long a put contract. If you have purchased 1,000 shares of stock and are holding that stock in your brokerage account, or elsewhere, you are long 1,000 shares of stock.
When you are long an equity option contract:
You have the right to exercise that option at any time prior to its expiration.
Your potential loss is limited to the amount you paid for the option contract.

With respect to this booklet’s usage of the word, longdescribes a position (in stock and/or options) in which youhave purchased and own that security in your brokerageaccount. For example, if you have purchased the right to buy100 shares of a stock, and are holding that right in youraccount, you are long a call contract. If you have purchasedthe right to sell 100 shares of a stock, and are holding thatright in your account, you are long a put contract. If youhave purchased 1,000 shares of stock and are holding thatstock in your brokerage account, or elsewhere, you are long1,000 shares of stock.When you are long an equity option contract:n You have the right to exercise that option at any time priorto its expiration.n Your potential loss is limited to the amount you paid forthe option contract.

Leave a Response