Buying A: Call Option

Leo’s option was now "in the money." Because he held the $160 strike call, he could technically buy the shares for $160 and immediately sell them for $200, netting a massive profit. Alternatively, he could simply sell the option itself, which had climbed in value from $5 to over $40.

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He opened his brokerage app and selected the call with an expiration date two months away. The premium was $5 per share. Since one option contract represents 100 shares , he paid $500. Leo’s option was now "in the money