Long
Stock |
...or
Buy Stock |
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Opinion:
Bullish to very bullish |
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| Description: | |||||||||||||||||||||||||||||||||||||
A very well-known and frequently used strategy. Often times it is the first strategy that an investor will use within his/her investment program. |
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| When to use: |
When bullish on XYZ and willing to accept
the strategy’s risk/reward profile. It offers a great deal of
potential if opinion is correct. If wrong, it has a great deal of inherent
risk. |
| Profit & Loss Characteristics: |
| Profit increases
as XYZ rises. Loss increases as XYZ declines. The strategy’s P&L is based solely on the difference between the initial purchase price and the eventual selling price. |
| Break-even Point: |
| Purchase price. |
| Time Decay : |
| None. |
| Volatility: |
| The more volatile the underlying stock becomes, the greater the potential for larger profits and larger losses. |