if i buy a call , strike $10 when price of stock 5, say. so now the stock trades at $20, can i just exercise the option, making my profit(100X10-(premium+commission)) ? couldn't i just buy an in the money option and immediately exercise it? or does the cost of the premium of the deeply in the money option outweigh any profits made by exercising it immediately? As you can see i'm a complete noob on options, what i mainly want to do with them is hedge, i.e. go long a stock and place a put under price. Don't want to start straight away as i don't want to trade these sometimes hard to understand securities, so any good books for the beginner?