In this basic position, an investor buys the underlying asset, ABC Ltd. shares for instance, for Rs. 2220, and sells it at a future date at an unknown price, St. Once it is purchased, the investor is said to be "long" the asset. Figure 1.1 shows the payoff for a long position on ABC Ltd.
Figure 1.1 Payoff for investor who went Long ABC Ltd. at Rs. 2220The figure shows the profits/losses from a long position on ABC Ltd.. The investor bought ABC Ltd. at Rs. 2220. If the share price goes up, he profits. If the share price falls he loses.
