In options trading, what does holding a long position typically involve?

Holding a long position in options trading involves assuming that an asset will increase in value. Investors who take a long position expect that the price of the underlying asset will rise in the future. This is typically achieved by purchasing call options, which give the investor the right to buy the underlying asset at a predetermined price (strike price) within a specified timeframe. If the asset’s price increases, the call option becomes more valuable, allowing the investor to either exercise the option to buy the asset at a lower price or sell the option for a profit.

The other choices don't reflect the nature of a long position. Short selling refers to selling an asset one does not own, betting that its price will decline, which is the opposite of a long position. Buying put options is a strategy used when an investor expects the asset's price to decrease. Finally, using only cash for transactions does not specifically relate to holding a long position, as long positions can also be taken using margin or financing options. Thus, the expectation of an increase in asset value is central to the concept of a long position.