stefanDM

Thanks for the info. I'm still a bit confused though. Correct me if I'm wrong, but the strike price is not necessarily the value of the stock, no? Plus I would need to subtract it from the value of the stock in order to exercise the option. So let's say after 4 years I want to exercise 100,000 stocks at 1$ strike price each. Let's say the the current valuation is 5$ per stock. My return is 100,00$ * 5, minus the cost of the strike price (100,000$). In total that's 400,000$

So I'm not sure why the strike price is used to define the value, since I would need to pay that amount anyway. I would make a profit for any dollar for which the stock is valued after the strike. Or am I getting it wrong?