Can I please have advice on how you people trade options. I don't want to straddle anything yet though.
For the sake of argument, I think DJS will be $2.10 by 23/3/5.
The $2 call DJS13 is now being offered for 4c. (theoretical ??)
So if I bought them, basicall I would pay $40 per contract, and my risk reward would basically be I win for anything >$2.04.
So if I bought 100 contracts (for $4000), and the share price on 23/3/5 was $2.10, I could sell the contracts back to the MM for about $6000.
Is this the absolute basics????
Can I sell on 23/3/5 or would I have to buy the shares on expiry?
If the option goes ex div, is this already factored into buy price?