Hi, I've been investing for years with stocks but I just recently got into options. Ok so say I'm looking at XOM Dec 08 options. As of the time of typing this post, the call option XOMLP.X with a strike price of 80 traded last at $3.15. Question 1: If I were to buy this contract it would cost me $315 + commission, right? Question 2: In order for me to make money on this long call position, the price of XOM would have to get above $83.15, right? Question 3: Say before Dec 2008 the price of XOM gets to $100. Owning this contract gives me the right to buy 100 shares of XOM at $80, and this is called "exercising" my contract, right? So I hear that the way options pricing works, there is never a time in the life of a contract when it is more profitable to exercise the option and buy the stock and then immediately sell the stock, and it's always more profitable just to sell the long call contract to close the position. Is this true? Question 4: In the event that XOM goes to $100 before this contract expires, how much would I be able to sell it for? $10,000 (value of 100 shares of XOM @ $100) - $8315 (value of 100 shares @ strike price + premium) ------------- $1,685? Or do I have that wrong? If that's correct, does that mean the contract would be trading at $20 then? So my profit would be $2000 - the $315 I paid = $1,685? Thanks.