Final answer:
The maximum gain of a long call is unlimited and occurs when the stock price increases significantly. The maximum loss is the premium paid for the option, and the breakeven point is the strike price plus the premium paid.
Step-by-step explanation:
The maximum gain of a long call occurs when the stock price increases significantly. The potential gain is unlimited, as the call buyer can profit from a rise in the stock's price beyond the strike price plus the premium paid. For example, if a call buyer purchases a call option with a strike price of $50 and the stock rises to $70, the call buyer can exercise the option and buy the stock at $50, then sell it at $70 for a $20 profit per share.
The maximum loss of a long call is the premium paid for the option. If the stock price does not increase above the strike price, the call buyer loses the premium paid. However, this is the maximum loss, as the call buyer can choose not to exercise the option if it becomes worthless.
The breakeven point of a long call is the strike price plus the premium paid. At this point, the call buyer neither gains nor loses money. If the stock price increases above the breakeven point, the call buyer starts to profit.