Options Trading Tutorial

Exercising/ Offsetting stock options?

Hi, I am wondering if I buy a call option on say ZZZ at $80 now and sometimes later before expiry that ZZZ went to $95. Now if I want to exercise my option (buy and then immediatly sell the stocks to capture the gain), do I need the capital to buy the underlying the stock? Meaning, do I need to have $80000 first to buy the stocks before I sell it? Thanks

Public Comments

1. no.
2. You do need the capital, unless you have a margin account (which is analagous to obtaining a loan from your brokerage company against your other positions). The best bet is to simply sell the option, that way you do not need additional capital, and you are not destoying the time value imbedded within the option.
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