Posted by: nepdoc March 19, 2021
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"bought 3 contracts for lghl for 4/19 strike price 5 @.70.."
I haven't ever done options because never understood it. Can you let me know if I understand this correctly.
So you bought the option to buy 300 LGHL stock from now to 4/19 at $5, and you paid $210 dollars.
Today the stock price is 4.12 so if you bought it today it would have cost $1236 (4.12 x 300)
Let's say between now and 4/19, the stock price hits $10 and you choose to exercise your option. Does exercising your option mean the following?
- You essentially buy 300 stocks at $5 ie $1500
- You paid $210 to buy the option
- Your total cost was $1710
- when you exercise your option, the stock value is $3000 ie $10x300
So my question is, when you exercise your option, do you make a profit of (3000 - 1710) ie $1290. Or do you actually have to buy the 300 stocks and sell them on your own?
"bought 3 contracts for lghl for 4/19 strike price 5 @.70.."
I haven't ever done options because never understood it. Can you let me know if I understand this correctly.
So you bought the option to buy 300 LGHL stock from now to 4/19 at $5, and you paid $210 dollars.
Today the stock price is 4.12 so if you bought it today it would have cost $1236 (4.12 x 300)
Let's say between now and 4/19, the stock price hits $10 and you choose to exercise your option. Does exercising your option mean the following?
- You essentially buy 300 stocks at $5 ie $1500
- You paid $210 to buy the option
- Your total cost was $1710
- when you exercise your option, the stock value is $3000 ie $10x300
So my question is, when you exercise your option, do you make a profit of (3000 - 1710) ie $1290. Or do you actually have to buy the 300 stocks and sell them on your own?
Last edited: 19-Mar-21 01:23 PM