really basic doubt about options

tnx 4 d really quik answr ......so u mean 2 say i earn profit evan if i sell d option b4 it hits d strike price (lyk i earn d diff btween d option rates )......

sorry for the really basic question ....bt m new to the whole option trading ....i have learnd alot bout call n put options lately though .....bt m insanely cnfused at d basic principle concept of buying and selling options ....pls help me out ...hre goes my doubt ..........


(1)suppose i wan2 purchas a call option of nifty say @5300 strike price n 27may2010........so nw i can get it @rs.4000/- cus d rate of option nw is rs..80/- ........nw sinc it is a call option @ strik price 5300 ....so is it possible to sell d option nw if its rate increases b4 it hits d strike price (lyk say jus 4 exampl sakes....if nifty reaches 5290 n rate of CA goes to rs.87/- )is it propr 2 say dat i ll earn rs.7/- profit if i sell it nw .....so (50*7=rs.3500/-)....

or

(2)i hav a total diff view dat says dat v hav 2 sell d option afta it reaches d strike price so if i sell it nw @5290 i ll b in loss ..........n i ll earn profit only afta it reaches 5300....so if say it goes 5310 ....so i ll earn (50*10=rs.500/-)profit ...bt only afta it reaches d strike price ...



so guyz pls help me out ...wich 1 is true (1) or (2) ...so du i c d cmp ....i.e nifty rate (lyk 5270...)or option rate (lyk hre 80...).........

And how much time did you really save by writing such 'sot kutz'??

Remember, you're not SMSing here. You're writing on a public board. Writing is a skill. Which also reflects much of your personality.

Atleast have some respect for the person who has taken time to reply in full words.

When you were buying the Call Option of Strike Price 5300 somebody was selling it, i.e. he was "allowed" to Sell it ... right.... so when you wish to sell the Call Option Bought by you, you can!!! Where is the confusion friend!!!???

I don't see anything wrong in it. He ain't here to impress us with his writing skills but clarifying his doubts. If he finds comfortable writing in the way he writes, let him do. Everybody here from mods to newbie using short form, including you.

He ain't disrespect anyone and ain't mean to. I don't know why you perceive things so complicated for his choice of words. Don't take it as I am getting into an argument. I don't like to. Be cool

thanks so i got your point here .....datI can sell n buy d option anytime irrespective of the strike price and strike price comes in picture only while exercising the option ....thanks !!!!

n yea NAC thanks for understanding and supporting ........