So I made my first options transaction. I believe that a stock that is currently trading around 25, will be in the 40s, come August - based on my research (I know the stock well, and I've invested in stocks for quite some time).
So: Current NYSE stock price $25. August 1st $27 Call, 10 contracts bought, at roughly 0.80 ($800 cost basis). This option is now trading at 1.50, as the stock has started to move upwards.. has a long way to go IMO.
My question relates to what I should do if my scenario comes true . Let's say in three weeks this stock goes to $35. So I'm in July beginning, options are going to expire in a month.
Should I sell the call ? The Options strike price was 27, the stock is at 35. How it will work out if I do this. I've never sold a call before.
I am bullish on this stock - so should I exercise these options - of course I'd need money to exercise 10 contracts (which is a 1000 shares, i.e. 27K).
I know things might not go per plan - but my question is more about if/when I need to exercise it, if this scenario happens (I am OK with losing initial investment of $800).