A low exercise price suggests a higher probability of the option being exercised.

Question

Quizplus · Accepted Answer

When the exercise price of an option is low, it means the option holder can buy or sell the underlying asset at a relatively cheaper price than the current market price, which increases the probability of exercising the option to realize a profit. Therefore, a low exercise price suggests a higher probability of the option being exercised.

A Low Exercise Price Suggests a Higher Probability of the Option