Question

Which one of the following options is in-the-money? call with a $45 strike and an underlying...

Which one of the following options is in-the-money?

call with a $45 strike and an underlying stock price of $42

put with a $35 strike and an underlying stock price of $36

call with a $15 strike and an underlying stock price of $15

put with a $45 strike and an underlying stock price of $42

call with a $30 strike and an underlying stock price of $29

Homework Answers

Answer #1

Answer: put with a $45 strike and an underlying stock price of $42

A call option is in the money when Stock price is greater than the Strike price. In option 1, 3 and 5, stock price < strike price and hence they are out of the money.

A put option is in the money when stock price is less than the Strike price. In option 2, stock price is greater than strike price and hence is out of money. But, in option 4, stock price is less than strike price and hence it is in the money.

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