Financial Industry Regulatory Authority (FINRA) Practice Exam 2026 - Free FINRA Practice Questions and Study Guide

The maximum potential gain of a long call option is considered to be unlimited due to the nature of how call options work. When you purchase a call option, you acquire the right, but not the obligation, to buy the underlying asset at a predetermined strike price within a specified timeframe. If the market price of the underlying asset rises significantly above the strike price, there is theoretically no upper limit to how high this price can go.

As the market price continues to rise, your potential profit increases correspondingly. For example, if you have a call option with a strike price of $50 and the stock rises to $100, your gain would be substantial, as you can purchase the stock for $50 and sell it for $100. If the stock price rises to $200, your profit would grow even further. This unlimited profit potential can continue indefinitely as long as the underlying asset continues to appreciate in value, which is why the long call option position is viewed as having unlimited upside potential.

In contrast, the other options reflect either misinterpretations or limitations that do not account for the complete nature of a call option’s profit potential.