Hello Tev,hello mr. wolfinger , I am a sort of a rookie when it comes to the options so answer me this question about call options: If i were to buy a call option that was in the money, could I buy the underlying asset and sell it and make the difference between the strike and current price? Tev
Yes is the answer to the question I think you are asking. So let me be certain I understand you correctly
1) If you 'buy the underlying asset and sell it' that would be an offsetting trade. In other words, if you buy the underlying asset and sell it (the same underlying asset), you would net nothing - and would have to pay commissions on the 2 trades.
2) I don't believe you are talking about buying a call option. I believe you want to sell that option to achieve the results you describe.
3) If you were to BUY the underlying asset and SELL (not buy) a call option that is in the money, then you could make a profit if the underlying asset is above the strike price when expiration day arrives. That profit is described below. Let's look at an example:
Buy 100 shares of stock, trading at 21.80Please write again if this explanation is not clear to you.