A put option described as out of the money would find:
A) the strike price is below the market price of the stock.
B) the market price of the stock and the strike price are equal.
C) the market price of the stock is below the strike price.
D) the option has expired.

Question

Quizplus · Accepted Answer

For a put option, being "out of the money" means the strike price is above the current market price of the underlying asset, not below. Therefore, none of the provided choices accurately describe an out-of-the-money put option. However, the closest incorrect choice given the context is A, which inaccurately states the condition for a call option, not a put option.

A Put Option Described as Out of the Money Would