If XYZ is at 12.50, you could buy to open a 10 Call for $3. That option controls 100 shares, so your cost is $300.

If the stock goes to 14 with a week before expiration, what will your 10 Call option be worth? That's a tricky question, because there will still be some time value left in the option. I would guess it might be worth 4.20. That would be $4 in intrinsic value, because the stock is at 14, and the option strike is at 10, plus my guess at 20c in time value.

So, your option went from $3.00 to $4.20, so your profit was (4.2-3.0)*100=$120.

If the stock dropped to 12 with a week left, your 10 Call would be worth $2, plus some time value, perhaps $2.10 total. So yes, you could sell to close your 10 Call option for $2.10. Your loss would be (3.0-2.1)*100 - $90.