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Now all I have to do is find out the best brokerage places to go through for options and im all set.

Well I think I finally understand how to use them. Thanks for all of your help everyone.

Alright well now I understand why I was lost to begin with lol . All the stuff ive read before talked about exercising them or writing them and not about being able to trade them. So thats why i was always confused about the premium price because when you excersize the option your using it up...

I see so I can loose more then the amount I paid for the option. If they exercise it on me because of my failure to close the position and the stock drops badly then.

I understand everything you were trying to say now MTE now that i know there is a difference in exercising it and just reselling it. All im trying to figure out now is if i sell the option that i bought is if its the same as being in a option writers position because I dont want to owe the next...

I understood what you were trying to say mte when they told me you can buy and sell them without excercising them . That was the thing that threw me off as we were talking because I thought exercising them was the only way out of the position . You said that I would get a call from the broker to...

alright and if i resold an option that I bought Im not subjected to the same problems as I would be if i actually wrote the option am I. Plus since you said the option would be automatically exercised if in the money on the date of experiation what happens if the buyer just bought the option...

So are you saying options can be traded freely without having to exercise them for a profit or writing an option ?

I thought that was how people take profit from options was by either writing them or by exercising them when a they gain value

Ya the value of the option did go up in the example you gave but i was talking about in the money ones lol. The out of the money ones would bring even more questions to my mind because i dont think you can exit a otm call option and gain a profit until after it reached the atm level because i...

Alright maybe a example will solve the issues. lets say we have an out of the money call 50 a at the money at 45 and a in the money at 35. From what ive read if i bought an in the money call at 35 and even tho the option trades closely with the stock i would still have to make up the amount of...

Are you saying it doesnt matter if I buy in the money or out of the money or the amount of the premium . That as long as the stock went in the direction I wanted it to go I made a profit as long as it goes up faster then the theta. Hmmm everything i seem to of read stated that you cant exercise...

I do know that an at the money call has about 50 delta meaning it goes about 50 cents on the dollar with the stock and in the money ones can have 75 or more so they trade pretty closely to the dollar I just never know how the profit is when it comes to what you pay the option compared to the...

Even tho it sounds like im being insulted at the same time as having it explained to me thanks for trying to help me.

where as you can profit by just a couple of dollars move in a stock but on an option it seems it has to move up several dollars to cover the price of the options premium and the decay so ya you might might 100 dollars for every dollar change in the stock once it hits a certain price but still...

It just seems to me like its alot harder to make a profit in options then in stock yes you make more when you make a profit cause its 100 dollars for each dollar the stock changes but still if you have to wait till it makes enough to cover the premium and the time decay it sounds like it takes a...

I know that at the money and out of the money options have more time value which decays over time. But if im understanding what your saying i have to make atleast the amount of the premium to make any profit at all and even more then that to make up for any time decay.

I see so the stock has to jump quite a bit in a short amount of time to really make a profit then since it has to cover the price of the premium as well.

ive took a course on options and it talked about deltas and stuff like that but the part it didnt explain is how i know when i have a profit or not. if i bought a call and the stock went up how do i know when ive made a profit or not. And the premium that I pay for the option is that lost when i...