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advice on options

great_at_golf · 2015-10-27 19:39:37

so in understand nearly all the basics of options trading , what id like some advice on is say i buy a call option today ( of a stock which is currently priced @ $110 ) which has a strike date of january 15th @ $130 if instead of closing out the trade , i chose to buy the stock , what price do i pay for those 100 shares ?…

27-10-2015 7:39pm

#1

great_at_golf

Banned (with Prison Access) Posts: 8 ✭

Join Date: October 2015

Posts: 6

so in understand nearly all the basics of options trading , what id like some advice on is

say i buy a call option today ( of a stock which is currently priced @ $110 ) which has a strike date of january 15th @ $130

if instead of closing out the trade , i chose to buy the stock , what price do i pay for those 100 shares ? on january 15th if the price is hit

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Comments

#2 27-10-2015 9:25pm

ulinbac

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Join Date: January 2010

Posts: 631

What is the share price? Has it hit the strike? You purchase the 100 shares at the strike if it becomes active. Otherwise you lose the premium on the call. You can let the price of the stock go far ITM and exercise the option before the option expires.

The Bible on this stuff is: Options, futures and other derivatives by Hull

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#3 28-10-2015 10:22pm

nuac

Registered Users, Registered Users 2 Posts: 6,769 ✭✭✭

Join Date: August 2008

Posts: 6315

Be careful with options.

It is amazing how quickly time can pass and how fast the value of the option can fall.

Not for the fainthearted.

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