Payoff from Call Options - A long on call is simply the purchase of one call option. It is a Bullish Strategy. It is used when the spot price is expected to be more than the strike price by maturity. The Maximum Loss is limited to the extent of premium paid and it arises when Spot Price < Strike Price

The Maximum Profit is Unlimited as the market rallies when Spot Price > Strike Price

The payoff from a long position in a call option can be given by:

Max (S – E, 0) – C

A short call is simply the sale of one call option. It is a Bearish Strategy. It is used when the spot price is expected to be less than the strike price. The Maximum Loss: Unlimited as the market rises and it arises when Spot Price > Strike Price

The Maximum Profit is Limited to the extent of premium paid and profit arises when Spot Price < Strike Price

The payoff from a short position in a call option

Min (E - S, 0) + C

Where,
E = Strike price
S = Price of the underlying security at maturity
C = Call option premium