I will explain it to you. Stock Option trading is not for unsophisticated investors. I recommend you read through this if you have any interest in options.
http://www.cboe.com/learncenter/pdf/understanding.pdf
At roughly 10:15 am on Friday morning, I entered a LIMIT order to buy 50 CALL OPTIONS to OPEN on Tesla for .40
Each contract controls 100 shares so I had control of 5,000 shares of stock. When you initiate a new position, it is called to OPEN and when you sell it's called to CLOSE. You can also SELL an option to OPEN a position but that is even more advanced on naked call selling. SUPER DANGEROUS!
The strike price was $265 and at the time I did the order, the stock was around $263, so I was still two dollars "out of the money", not counting the .40 per share I paid for the contracts. The option of .40 would be multiplied by 100 and equals $40 per single contract. It gives me the right to buy 100 shares of Tesla for each option contract.
At 10:17 the options order began getting filled in 3 blocks, 30 contracts at .40 ($40) for $1221, then 10 at .40 for $407 and then another 10 at .40 for $407 for a total of 50 contracts @ $2035, which INCLUDES commission.
Then as the stock began to rise close to the $265 strike price well before the end of the day, the options shot up to around .65-.80 around 12:10 pm.
I then began to enter sell orders in blocks of 10 contracts at MARKET PRICE to ensure the options sold. Then at 12:12 pm the options started to sell; 3 at .72 then 3 at .72 then 2 at .73 then 2 at .74 then 20 at .67 then 20 at .75 for a total of 50 sold contracts at a total sales of $3,509.85 INCLUDING COMMISSIONS.
So the end results:
50 bought at $2,035
50 sold at $3,509.85
Profit $1,474.85 in two hours.
The times stamps are on each executed trade, hour:minute:seconds
$1,474.85 / $2,035 = 72.5% profit