Charkitz, just to clarify, the Black-Scholes model is useful for...

Charkitz, just to clarify, the Black-Scholes model is useful for calculating the "value" of the option. The option has a value all the time and as the SP rises the option value generally rises too. It is leveraged as you are only paying a small premium for exposure. There is a "time" value built into it which needs to be considered. So you can still make a great return on options even though the SP doesn't reach the target price. I have a lot of options and many I never exersize, I just sell on market. Just the other side of the coin as it isn't an all or nothing scenario. Being "out of the money" doesn't mean you have lost - it just means that the price is related to the leverage and time premium. Talk to your broker about this if it sounds confusing as it has nuance.