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re: Options

Posted on 1/30/21 at 12:28 pm to
Posted by Big Saint
Houston
Member since May 2009
1454 posts
Posted on 1/30/21 at 12:28 pm to
In your example you wouldn't see a profit till the stock is above $15. The call option allows you to buy the stock at $10 but you're paying $5 at the moment for that so your profit calculation is wrong.

You can still make money if the stock jumps or IV shoots up and sell the call (like you would when you close a stock position) at a higher value before its expiration date.
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