Trading Stocks?Suppose a company maybe bought out. The share price is say 30. The buyout will come at 40. You want to be call option in January cause the merger will be done in the fall. You buy 30 contracts or the right to 3000 shares? Then strike the options after the merger is announced. So you strike the options at 10 per share profit aka 30 grand right? Isnt the best way to play a takeover stratgey? Obiosuly minus the cost to buy the options say roughly around 3000 for the calls. And lets assume I have heard something. I just am not sure the right way to play the stratgey. You stike the calls once the price jumps, with no money envolved. Earning the per share price profit of 10? Minus commisions and costs of course.

Sounds like insider trading. You know something fundamental about the takeover before it is public knowledge. Say you are the secretary of the company who is either buying or being bought out. You have confidential info right??Don't do it.By the way, you either excersise options or you sell an option..you don't strike an option.. By a call with a strike price of $30. Once the stock price hits $40, you have the option of buying at $30..Is that what you mean?? That's what a Strike Price means.The option will be "in the money" by $10 per share. Then you can (a)sell your option or (B)excercise the option and actually buy the shares at $30 per share and sell at $40 per share..Since you KNOW the stock price is going up..why not spend more and buy options that are already slightly in the money..say a strike price of $25??. Go all out!! WHY JUST SETTLE FOR A $30,000 PROFIT.BTW, what's the name of the company??