Business

Question

the current price of a stock is 200 if a coll option on this stock has a strike price of 201 the call is

1 Answer

  • The call in this scenario is known as Out of the money (OTM).

    Out of the money is when an option has no intrinsic value but rather, has an extrinsic value.

    • Here, the current stock price is below the strike price of 201,then, we say that the call is out of money.

    • A call option is called Out of the money when the underlying price is trading below the strike price of the call.

    Hence, the call in this scenario is known as Out of the money (OTM)

    Read more about Out of the money (OTM):

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