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It is almost always better financially to sell to close instead of exercising an option.
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You usually have a larger profit if you sell to close the option position instead of exercising the option then closing the resulting position in the underlying.
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If you exercise a call option you will buy the underlying security. If you exercise a put option you will sell the underlying security. If you use a sell to close transaction to sell the option you will not trade the underlying security.
Example:
Assume a stock is trading at $19.00 per share and you buy five call options with a strike price of $20.00 for $0.25 per share. Since the underlying for each stock option is 100 shares, it would cost you 5 x 100 x $0.25 = $125 to buy the five options. Now assume some time later (before expiration) the stock is trading at $20.50 per share and the bid quote for the $20 strike option is $0.75.
If you sold the five call options with a sell to close order you would sell them for 5 x 100 x $0.75 = $375. Your profit would be $375 - $125 = $250. If you exercised the options you would buy 500 shares of the stock for $20.00 per share, or a total of $10,000. When you add the $10,000 you paid for the stock to the $125 you paid for the options, that makes your cost basis for the 500 shares $10,125. You could then sell those 500 shares for $20.50 per share, of $10,250. Your profit would be $10,250 - $10,125 = $125.
I did not include commissions in the example to keep it simple..***:D
What i am going to suggest you is that we know in trading we cant say or imagine that what is going to happen in next 5mins,so if its going in good prices you should sell it and buy new one from the same.
I don't want to exercise my call option, but I am in the money, so I would like to sell to close. Do I still receive the same amount of gains if I exercised the option and then
