Question

If a call option is in the money, an identical put option will be ____. Group...

If a call option is in the money, an identical put option will be ____.

Group of answer choices

out of the money

in the money

at the money

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Answer #1

Out of money

An out of money call option is one which has a strike price which is greater than the current market price of the underlying asset. Conversely, an in the money call option is one which has a strike price less than the current market price of the underlying asset.

Similarly, an out of money put option is one which has a strike price which has market price of the underlying asset greater than the strike price. And conversely, an in the money put option is one where the market price of underlying asset is less than the cirrent price of the underlying asset.

These definition above mean,

Out of money put option is similar to in the money call option.

Out of money call option is similar to in the money put option.

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