Question

1. For the following sets of prices for stocks and the corresponding exercise prices under their options, state whether the option is “in the money,” “at the money,” or “out of the money.”
   1. Stock Price:   $80; Call Option Strike Price: $100 ____________________
   2. Stock Price:   $50; Put Option Strike Price: $75 _____________________
   3. Stock Price:   $30; Call Option Strike Price: $30 _____________________
   4. Stock Price:   $20; Put Option Strike Price: $15 _____________________
   5. Stock Price:   $90; Call Option Strike Price: $70 _____________________

Answer 1

A. Stock price $80 ; call option strike price $100

As the stock price < call option strike price ; the call is out of the money by $20

B.Stock price $50 ; Put option strike price $75

As the stock price < put option strike price ; the put is in the money by $25

C. Stock price $30 ; Call option strike price $30

As the stock price = call option strike price ; the call is at the money

D. Stock price $20 ; Put option strike price $15

As the stock price > put option strike price ; the call is out of the money by $5

E. Stock price $90 ; Call option strike price $70

As the stock price > call option strike price ; the call option is in the money by $20

Let me know in the comment section in case of any doubt.