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    Question

    In case of a 'put option' when the strike price is above

    the spot price, the option is -
    A Out of the money Correct Answer Incorrect Answer
    B At the money Correct Answer Incorrect Answer
    C In the money Correct Answer Incorrect Answer
    D Out of stock Correct Answer Incorrect Answer
    E In the stock Correct Answer Incorrect Answer

    Solution

    In the money means that a call option's strike price is below the market price of the underlying asset or that the strike price of a put option is above the market price of the underlying asset. Being in the money does not mean you will profit, it just means the option is worth exercising. This is because the option costs money to buy.

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