Long Stock

Shares owned outright: the position gains one for one as the share price rises and loses the same way as it falls.

Also called Shares, Buy and hold

Outlook

Bullish

Family

Basic

Level

Novice

Legs

1 leg

Expirations

1 expiration

Opens for

Debit

Maximum profit

Unlimited

Maximum loss

Limited

Requires shares

Yes

Legs at the reference strikes this page's diagrams are drawn from

Leg	Side	Contract	Ratio	How the strike is chosen
	Long	Shares	1

What it is

Shares bought and held. There is no strike, no expiration and no premium: the position is worth whatever the shares are worth, and it stays open until it is sold.

It appears in this encyclopaedia because it is the baseline. A covered call is this position with a call written against it; a protective put is this position with a floor bought under it; a collar is both at once. Each of those trades away part of what this page describes in exchange for something else.

The payoff

At expiration

A single straight line rising left to right through the zero line: the position loses one for one as the price falls and gains one for one as it rises.

One straight line at forty-five degrees. Every dollar the share price rises is a dollar gained, and every dollar it falls is a dollar lost, with no corner anywhere.

The loss is bounded only because a share price cannot go below zero, which is why the fact box above says Limited rather than Defined: the floor exists, but it is the whole investment.

How it behaves before expiration

Today, before expiration

Today's line and the expiration line are the same line: shares have no time value, so nothing about the position changes as time passes.

The two curves are the same curve, and that is the point rather than an omission in the drawing. Shares carry no time value, so there is nothing to decay: the position is worth exactly its market value today, tomorrow and in a year.

Every other page in this encyclopaedia shows a gap between the two lines. That gap is the option premium — the part of an option’s price that is not intrinsic value and that goes to zero at expiry. Here there is no gap because there is no premium.

The Greeks

Delta is 1.00 per share, or 100 per round lot, by definition. A share is the unit every other delta is quoted in.

Gamma, theta and vega are all zero. Delta never changes, nothing decays, and implied volatility does not enter the price. This is what makes shares the reference point: an option position’s delta is usually described as the number of shares it currently behaves like.

Where it lives in the volatility environment

Nothing about a share position responds to implied volatility directly. Realised volatility changes what the position is worth, because it changes the price; the implied volatility of the options on it does not.

What can go wrong

• The full investment is at risk. The loss is bounded by zero, and zero is a real outcome for a single company.
• Capital is committed. A round lot at 100 is 10,000 of buying power, where the option positions built on it need a fraction of that.
• A dividend and its ex-date matter for anything written against the position later — see covered call.
• Short interest and borrow costs do not apply here, but they do to the other side: see short stock.

Building it in Option Panel

Shares are not built in Build Strategy — they arrive in a trade through a fill, imported from a broker or entered by hand. The builder uses them as a leg only inside a structure that requires stock, such as a covered call or a collar, where the shares must already be in the trade.

Back to the encyclopaedia · What-if analysis in the docs

Related strategies

• Covered Call — these shares with a call written against them, trading the upside above the strike for a credit.
• Protective Put — these shares with a floor bought under them, paid for in premium.
• Long Call — the same directional view for a fraction of the capital, with an expiration date attached.