if the contract price is 200 and i am buying contract of next month say jan . with strike price 225 . and what will happen if the price of stock crosses 225 . what happens if the price do not crosses 225.?
If you buy 225 calls, on expiry day the price of stock has to be over 225 for you to receive any premium back. If it is at 230, you will receive 5 back. If it closes at 225 or lower, the option premium will be 0.
That said, you don’t have to wait till expiry, if you buy the calls and markets go up, the value of calls also will go up immediately. Suggest you to go through F&O module here: http://zerodha.com/varsity/