I use Robinhood and I bought 1 call at 1.50 and it was set to expire March of 2021. Well the call was somehow loosing money even tho the stock was going up. So I seen I could exercise the call option for 2.50. So I decided to sell off all my other stocks to get $250 to exercise the call option. I did that and it made my account freak out showing numbers I haven’t ever had. My question is since I spent 150 on the option to start with then exercised the option for 250 did I just loose $100??? I’m really lost about it.
First off, you should never exercise an option before the strike date, unless you're doing a complex strategy like box spreads. Sounds like you just wasted $150 buying the call. Since you exercised today, an option that was letting you wait until March 2021, then you bought 100 shares of that stock for $250 (you would have gotten those 100 shares on March 2021 for just the $150 you paid at first). This is why you never exercise early -- you had the benefit of time to wait to see if those shares were worth it. This is what it sounds like; mind giving the name of the stock?
Lesson learned. You don't know what you're doing. Keep it simple. Just buy and sell. No fancy trading. Stay away from low value, speculative, volatile penny stocks.
