I bought an XYZ $50 call for $5. Expiration is in two weeks. The day after I bought the option, there was news about a data breach and the stock's price dropped to $25. I know that the stock is not going to recover in two weeks but I want to sell the option and get some money back. Will I get paid only the bid price of the call when XYZ is $25? For example, if that price is $3, can I sell the call and recoup $300? That means a loss of $200.
Let's look at another scenario where XYZ went up to $53 and then crashed to $25 the day before expiration. Since the bid price at $3, can I recoup $300?
In these two two cases, does it mean that when the premium has lost its value mean that the option is losing the value? Does the value matter if the price of the same stock is above the strike price, for example the stock price is $60 on the day of the expiry?