Anonymous ID: 5484d2 Jan. 29, 2021, 10:16 a.m. No.12757454   🗄️.is 🔗kun

>>12756239 (lb)

 

If you purchased a call for $5 and the call is now worth $300, IF you exit you position (sell your call to close the position) you have amde a $275 profit on that one call.

 

A call is a contract - yes, it has a number of shares 'attached' to it but you don't trade in the shares themselves.

 

I should know as I have traded calls and puts myself. I am not interested in the share price but the option (call or put) price and how much time is left before it expires.

 

To give you a real world example from something I actually did….

 

I purchased put options (betting on the market to fall) on Dell for $5 with an expiry of 3 weeks. They were cheap because they were way below where the market was in realtime.

 

I bought 7 of them for a total cost of $35.

 

On the day of expiry the shares drop like a tank and the put options became valuable to the tune of $100 each because the price went below where I had purchased the put options and due to that the options were now 'in-the-money' and reflected (to a degree) the real value of the actual shares themeselves.

 

Total profit for the entire trade was $665.

 

That's nearly a 2,000% profit.

Anonymous ID: 5484d2 Jan. 29, 2021, 10:26 a.m. No.12757554   🗄️.is 🔗kun   >>7579

>>12756239 (lb)

 

If you purchased a call for $5 and the call is now worth $300, and IF you exit you position (sell your call to close the position) you have amde a $275 profit on that one call.

 

A call is a contract - yes, it has a number of shares 'attached' to it but you don't trade in the shares themselves.

 

I should know as I have traded calls and puts myself. I am not interested in the share price but the option (call or put) price and how much time is left before it expires.

 

To give you a real world example from something I actually did….

 

I purchased put options (betting on the market to fall) on Dell for $5 with an expiry of 3 weeks. They were cheap because they were way below where the market was in realtime.

 

I bought 7 of them for a total cost of $35.

 

On the day of expiry the shares drop like a tank and the put options became valuable to the tune of $100 each because the price went below where I had purchased the put options and due to that the options were now 'in-the-money' and reflected (to a degree) the real value of the actual shares themeselves.

 

Total profit for the entire trade was $665 (after expenses).

 

That's nearly a 2,000% profit.