CFA Level 1 Buying Calls

LOS

a. determine the value at expiration, profit, maximum profit, maximum loss,
breakeven underlying price at expiration, and general shape of the graph of the
strategies of buying calls and indicate the market outlook
of investors using these strategies;
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The maximum loss of the strategy of buying a call is the premium or the price paid for buying the call.

The maximum gain of buying a call is unlimited.

The break even point of buying a call is X + c where X is strike price and c is the call premium paid.

The market out look of the investor has to be bullish outlook for the underlying stock