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ray · 02-07-2004, 02:24 AM

LK-

You mention that if I were to purchase an Put or Call option that I would HAVE to exercise it (buy/sell at a certain strike price). I was under the assumption that the option is only a right to buy/sell at a certain price, but not an obligation to. Hence, I could trade the option itself, right?

For example: I buy Call Option X for 1.00 with expiration in 12 months. In the 11th month, the Call Option price has risen to 20 bucks. Couldn't I just sell the Call Option for 20 bucks and make a profit of 19?

02-07-2004, 02:24 AM	#6
ray captain awesome Join Date: Jan 2003 Posts: 7,054	LK- You mention that if I were to purchase an Put or Call option that I would HAVE to exercise it (buy/sell at a certain strike price). I was under the assumption that the option is only a right to buy/sell at a certain price, but not an obligation to. Hence, I could trade the option itself, right? For example: I buy Call Option X for 1.00 with expiration in 12 months. In the 11th month, the Call Option price has risen to 20 bucks. Couldn't I just sell the Call Option for 20 bucks and make a profit of 19?