Long Call / Long Put

Long Call (You imagine the underlyings price will rise strongly)

You have the right to buy the underlying at a specified date (European futures) or timeframe (American futures) for a specified price. You expect the prices of the underlying to rise (Long). Your risk is limited: The maximum you can lose is the option premium.

Example: You buy a Long Call with an exercise price of 10 Euro for a price (premium) of 1 Euro. If the underlying price (eg. stock) rises from 10 Euro to 12 Euro you make one 1 Euro profit.

Long Put (You imagine the underlyings price will decrease strongly)

You have the right to sell the underlying at a specified date (European futures) or timeframe (American futures) for a specified price. You expect the prices of the underlying to fall. Your loss is limited: The maximum you can lose is the option premium.

Example: You buy a Long Put with an exercise price of 10 Euro for a price (premium) of 1 Euro. If the underlying price (eg. stock) falls from 10 Euro to 9 Euro you make 1 Euro profit.