Course Description
Unlock the potential of directional trading with the Long Call strategy. In this course, we move beyond simple "bets" and look at how professional traders use In-the-Money (ITM) calls to gain market exposure with lower capital than buying the index outright. We will use a live US 500 example to break down the math, the probability, and the IG-specific execution.
Traditional Options vs. Spread Betting
IG’s "options" are actually Spread Bets based on option prices, offering a unique edge for traders in the UK and Ireland.
Tax Status: Spread betting is unique to the UK and Ireland. Profits are exempt from Capital Gains Tax (CGT) and Stamp Duty.
Trade Unit: Instead of "contracts" (100 shares), you trade in $ per point (or £ per point).
The Credit Advantage: Unlike the Bear Put Spread where you pay a debit, here you receive a credit upfront. You are the "house" collecting the premium.
Currency: You can trade US markets in GBP or USD to avoid FX conversion fees.
Note: While you can fund in Euro, spread bets on options are executed in GBP or USD only.
Module 1: What is a Long Call?
Buying a Call option gives you the right (but not the obligation) to buy an asset at a set price (the Strike) before a certain date (the Expiry).1
The Market View: You are "Bullish." You expect the US 500 to rise significantly.
The Leverage: Instead of paying $6,950 for the full index, you pay a smaller Premium to control the same price movement.
Defined Risk: Your maximum possible loss is strictly limited to the premium you pay upfront.2
Module 2: The US 500 Case Study (Deep ITM)
In this example, we are buying an In-the-Money (ITM) call.
The Setup:
Current US 500 Price: $6,950
Expiration: 35 Days
Strike Price: $6,800 (Deep In-the-Money)
Premium (Cost): 220.35 points
The Math at $5 per point:
Total Cost (Max Risk): 220.35 times $5 = 1,101.75
Intrinsic Value: 6,950 - 6,800 = 150 points
Extrinsic Value (Time Cost): 220.35 - 150 = 70.35 points
Breakeven Point at Expiry: 6,800 (Strike) + 220.35 (Premium) = 7,020.35
Module 3: Strategy Pivot—Reducing Risk with a Spread
The biggest enemy of a Long Call is Time Decay (Theta). If the market stays flat, you lose those 70.35 points of time value.
💡 The Spread Upgrade: To offset this cost, you can turn this trade into a Bull Call Spread. By selling a higher strike call (e.g., at $7,100) against your $6,800 call, you receive a credit that lowers your total cost. If the market drops, your total loss is reduced because you collected that extra premium upfront.
Module 4: "What If?" Expiry Scenarios (Long Call)
What happens to your $1,101.75 investment after 35 days?
Scenario A: US 500 stays Flat (closes at $6,950)
Your option is worth 150 points. You lose the 70.35 points of time decay.
Total Result: Loss of $351.75. ($70.35 times $5).
Scenario B: US 500 drops to the Strike (closes at $6,800)
The option is worthless at expiry.
Total Result: Max Loss of $1,101.75.
Scenario C: US 500 rises to $7,100 (Bullish Move)
Your option is worth 300 points (7,100 - 6,800).
Your net profit is 300 - 220.35 = 79.65 points.
Total Result: Profit of $398.25. (79.65 times $5). This is a 36% return on your investment from a roughly 2% move in the underlying index.
Module 5: Navigating Without Greeks (The Workaround)
IG Index does not display Delta on their tickets.
The External Compass: Use a free tool like Yahoo Finance to find the $6,800 Strike on the SPX (S&P 500).
Verify Delta: Look for a Delta of 0.75 or higher for this specific ITM strategy to ensure you have a high probability of profit.
Strategy Comparison: Risk vs. Probability
Choosing the right strategy depends on your market view and your risk tolerance. At ShareNavigator, we emphasize Probability of Profit (PoP) over "lottery ticket" home runs.
Strategy | Market View | Max Profit | Max Risk | Probability of Profit | Best For... |
Long Call | Aggressively Bullish | Unlimited | Premium Paid | ~30% - 40% | Fast-moving rallies. |
Aggressively Bearish | Significant | Premium Paid | ~30% - 40% | Hedging a crash. | |
Neutral to Bullish | Net Credit | High | 75% - 85% | Consistent income. | |
Neutral to Bullish | Net Credit | Capped | 70% - 85% | Consistent income. | |
Neutral to Bearish | Net Credit | Capped | 70% - 85% | Selling "resistance" | |
Moderately Bullish | Capped | Net Debit | ~50% - 60% | Cheap bullish entry. | |
Moderately Bearish | Capped | Net Debit | ~50% - 60% | Cheap bearish entry. |
Why Credit Spreads Have a Higher Win Rate
A common question students ask is: "Why not just short the stock or buy a long put if I'm bearish?"
The answer lies in the three directions of the market:
Shorting a Stock / Long Put: You only win if the market moves DOWN. If the market stays flat or goes up, you lose. (1 out of 3 scenarios).
Bear Call Spread: You win if the market moves DOWN, stays FLAT, or even RISES SLIGHTLY (as long as it stays below your ceiling). (3 out of 3 scenarios).
By "selling" time and volatility instead of just betting on direction, you turn the math of the market in your favor.
💡 The ShareNavigator Golden Rule
"We don't try to predict the next 500-point move. We try to identify the 300-point range where the market won't go. Trading is not about being 'right'; it's about not being 'wrong' enough to lose money."
🧪 Practice Before You Trade (Risk-Free)
We strongly recommend that all our students start by practicing these strategies in a simulated environment. This allows you to master the IG deal ticket, understand price fluctuations, and test your "Option Income Engine" without risking a single penny.
Switch to a live account only once you are comfortable with the platform and your strategy execution.
🚀 Free Strategy Call
Trading theory is only 10% of the journey. The remaining 90% is mastering strategy application, market psychology, and capital preservation under live conditions.
Don't risk your capital making avoidable beginner mistakes. Leverage the experience of a dedicated trading mentor.
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