Futures and Options (10)

Options (4)

Two, you don't exercise your option but instead sell your right to buy 1,000 XXX shares.

You can sell your option for $10 a share and receive $10,000.

Your profit will equal $10,000 minus your premium $3,000 equals $7,000.

Either way, the end result is the same (a profit of $7,000), but selling your option is less cumbersome.

It is up to you which way to go, although most of the time, investors don't exercise their options to buy the security