Buy Stock
A.K.A. Long Stock
investment
Opinion: Bullish to very bullish.
Example: Long 200 Shares XYZ @ $60
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.
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. |
