Question about long calls/puts

I am fairly new and only doing calls and puts at the moment. I have a couple questions I am sure someone can answer.

 I want to make sure I have this right with no surprises on that I am doing this correct.

First I would buy to open to open a long call Correct?

And when I want to take my profits or cut my losses, I would sell to close Correct?

Now technically I can sell to close at anytime before the expiration date, whether its 3 hours 3 days or 3 weeks Correct?

And once I did that, sell to close I mean, I am done with that position, whatever effect it has on my account balance is what it does, correct? I am done with that position and no longer obligated to it in anyway Correct?

Am I correct in this thinking or am I way off base? I think I am right, but want to make sure.

Thanks for your help

 

The best way to do this is this.

TradeKing wrights the contracts and manages them for .65 a trade.

I come along and I buy to open a sell CALL. Company XYZ @ strike 2.00 share price $10. I think the share price is going up because there is news that the company is going to post huge revenue.

Great, i get the option the $200.65 is debited in my account.

2 weeks later you come along and see my sell call. In fact you see it is huge in the money. share price is $20 for xyz.

you also see the Buy call is $10 XYZ @ strike $18. you look it over and realize that the forward momentum of technicals with the added news that the huge revenue that they are going to post is even better than (me) the seller had expected.

So you go ahead and buy the long call. $10 XYZ @ strike $!8, share price is $20

$1800.65 is debited from your account. So now that you bought to open you have some decisions to make.

You can wait and see if you are correct, if share price goes up then the strike price goes up. you might want to sell the option for the quick gain. of $200 or $300.

You can exercise your right, and buy the 100 shares, then keep them in your portfolio, or sell on the open market.

You can wait and if the share price falls to lets say $9 then you can simply let expire.

You have to understand depending which action you take as a buyer affects the seller conversly. because the seller has to fill those 100 shares or 1 option when you activate your direction or strategy.

It is basically a triangle with the Brokerage (Tradeking) on top and the buyer and seller at the bottom two points.

I believe TradeKing has a beginner practice area in there learning center or option trading center, worth the time to check it out.

If I remember correctly, TradeKing accounts have automatic excercise.  So, if you buy a call and it is in the money at expiration, it will be excercised automatically over the weekend.  You can call and request automatic excercise turned off if you wish.