|
When the price of the
underlying security is equal to the strike price, an option is
at-the-money.
A call option is
in-the-money if the strike price is less than the market price of
the underlying security. A put option is in-the-money if the
strike price is greater than the market price of the underlying
security.
A call option is
out-of-the-money if the strike price is greater than the market
price of the underlying security. A put option is out-of-the money
if the strike price is less than the market price of the
underlying security.
Examples
| Option |
Strike
|
Stock
|
At-the-money
In-the-mone
Out-of-the-money
|
| Call |
35 |
$29 |
out-of-the-money |
| Put |
45 |
$52 |
out-of-the-money |
| Call |
25 |
$25 |
at-the-money |
| Put |
100 |
$101 |
at-the-money |
| Call |
10 |
$16 |
in-the-money |
| Put |
40 |
$25 |
in-the-money |
|
