Long premium
Definition · Level 2 · Long options & hedges
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Being a net buyer of options: you pay up front, time decay works against you, and big moves or rising IV help. On an options-only position the most you can lose is what you paid.
Example
“I'm long premium into the print — worst case I lose what I paid.”
Where Tradecraft teaches it
Level 2 · Long options & hedges, in the lesson “Buying calls and puts”: Pay a premium for the right to profit from a move — your risk is capped at what you paid.
Related terms
- Defined riskA position whose worst-case loss is known and capped at entry — any long option, or a spread whose long option limits the short one (verticals…
- Long CallPay a premium for the right to buy 100 shares at the strike.
- Long PutPay a premium for the right to sell 100 shares at the strike.
- ArbitrageLocking in a profit, riskless in principle, from a price discrepancy by simultaneously buying the cheap side and selling the rich side of equivalent…
- Borrow feeThe annualized fee a short seller pays to borrow shares (and a lender earns); large on hard-to-borrow names.
- CollarOwn the stock, buy a put below and sell a call above.