Hello,
I am a total total newbie to the world of stocks/options.
I have a question about CE (Call option European way)
Suppose I buy a CE option on a stock, option details
- Spot Price 400
- Strike Price 350
- Premium 50
- Lot Size 1
- One month expiration period
I understand, for me to be profitable after expiry period stock price has to be more than 400 (strike price + premium), say spot price after expiration period is 410.
1. Do I have to buy that stock at 350 from the seller, sell it in the open market at 410 and then only I can realize my profit of 10 or at the end of
expiration I automatically get amount of 60 in my account?
2. At the end of expiration period, I want to retain the stock, i.e. I don't want
to really sell it, which means I need to pay 350 to the seller. How it is done?
regards, Yogesh
I am a total total newbie to the world of stocks/options.
I have a question about CE (Call option European way)
Suppose I buy a CE option on a stock, option details
- Spot Price 400
- Strike Price 350
- Premium 50
- Lot Size 1
- One month expiration period
I understand, for me to be profitable after expiry period stock price has to be more than 400 (strike price + premium), say spot price after expiration period is 410.
1. Do I have to buy that stock at 350 from the seller, sell it in the open market at 410 and then only I can realize my profit of 10 or at the end of
expiration I automatically get amount of 60 in my account?
2. At the end of expiration period, I want to retain the stock, i.e. I don't want
to really sell it, which means I need to pay 350 to the seller. How it is done?
regards, Yogesh