Options Trading Tutorial

in case of options trading(call),if the stock is above strike price+premium,directly buy selling that.......?

call option can i book profit (or) i need to buy the stock at the strike price at which i took the call option and sell it at the spot price to book profit................

Public Comments

1. Too risky dear friend.
2. Just sell the option to close, if the profit takes care of comm. & option charges. Unless you think the stock has further to go. Then either buy a higher strike call/longer date or take the stock up by exercising the option.
3. Yes you can. In fact thats what normally happens unless you have directs to actually exercise the option. I also dont think that Forex is a safer alternative to options. Especially if you are writing covered calls its the safest form of investing out there.
4. e.g. Strike = 30 Call Premium = 2 Stock = 33 If you sell this call you are locking in a loss. The call should have an intrinsic value of $3. If there is still time to expiration then there should be additional time premium. You are giving someone the right to buy stock at 30 and they are paying $2 for the right and the deal is worth $3.