Buying call options

If you are closing your position before the expiry, the difference between premium paid to buy the option and premium you will receive upon closing the position will be your P&L. Just like it is with stocks, where difference between buy and sell price is the P&L.

If you are not squaring-off the position and letting it expire. Then, if the option is ITM (Spot Price > Strike Price), it’ll be settled at intrinsic value (Spot Price - Strike Price) and the difference between buy price and settlement price will be your P&L.

If the position is OTM (Spot Price < Strike Price), the option will expire worthless and you will lose the entire premium paid.

Do check out this post for more information: What happens if I don't square off my positions in options? - #2 by ShubhS9

Would also suggest you go through this module on Varsity for deep dive into options:

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