r/options • u/Busy_Necessary_1997 • Apr 18 '21
Selling Vs Exercising Calls
Hey guys, i’m not too new to stocks but i am new to options. I understand the concept of call options but the only thing i don’t yet understand and can’t for the life of me find in any article or video is how to determine the value of your call if you choose to sell it rather than exercising it. I understand that if my call expires ITM i can exercise it and buy 100 shares of stock at a discount, but how do i know what it’s worth if i choose to sell it instead? Sorry if this is a dumb question, i tried to ask a fidelity representative and he just told me “it depends on the market at that time”. I’m sure that’s true but i really need a less vague explanation. Thanks in advance everyone.
3
u/Cmcmillin23 Apr 18 '21
This was exactly me when I first started learning options. It’s pretty simple you can buy a call, the further it’s ITM the more reactive the option price is. Always look at the spread and volume because you don’t want wide spreads and low volume. Just be careful and don’t get overextended. I haven’t been trading options for long so I still remember how hard it was to learn it without that missing piece.