HI All,
Have been trading in cash from quite some time, got interested in options, pretty much got the idea, but I got a doubt in trading options, hope to get it cleared:
Lets say: LICHSGFIN stock is trading at 195
I buy a call option with strike price of 200 at 8.50
If the stock value goes above ( 200 + 8.50 ) - I will be in profit, provided I sell it.
But what happens if the stock value goes down to 170 ?
( There is still 2 weeks till expiry ), at this stage, am I in loss ?
And, lets say, after two days, the stock price went high to 220 ( from 170 )
( There is still 1.5 weeks till expiry ), does this mean, I am in profit even though the price went down after I purchased ( to 170 ), but still came back up to ( 220 ) above my buying price?
Please help a learner.
Thank you in advance, have learnt a lot from traderji.
Have been trading in cash from quite some time, got interested in options, pretty much got the idea, but I got a doubt in trading options, hope to get it cleared:
Lets say: LICHSGFIN stock is trading at 195
I buy a call option with strike price of 200 at 8.50
If the stock value goes above ( 200 + 8.50 ) - I will be in profit, provided I sell it.
But what happens if the stock value goes down to 170 ?
( There is still 2 weeks till expiry ), at this stage, am I in loss ?
And, lets say, after two days, the stock price went high to 220 ( from 170 )
( There is still 1.5 weeks till expiry ), does this mean, I am in profit even though the price went down after I purchased ( to 170 ), but still came back up to ( 220 ) above my buying price?
Please help a learner.
Thank you in advance, have learnt a lot from traderji.