options call

[cashclay]

So if the bid price is at 1$ and the strike difference is 1$ will i be making a 2$ gain (this goes without subtracting what i paid for in the ask price) or will i just be making the bid price

 

[jo0477]

The option price at a given strike will be made up of two components: The Extrinsic (Time) value and any Intrinsic (underlying) value. For a 10.00 call on an 11.00 stock the price will equal 1.00 (intrinsic) + x amount of extrinsic (time) value depending on the implied volatility and time to expiration. On liquid options, the bid/ask should be reasonably close to fair value.