When an option has intrinsic value, it is said to be:
A) In the money.
B) Out-of-the money.
C) At-the-money.
D) Time dependent.
E) None of the above.

Question

Quizplus · Accepted Answer

An option is said to be "in the money" when it has intrinsic value. This means that the option would lead to a profitable trade if it were exercised immediately. For call options, this is when the underlying asset's price is above the strike price. For put options, it is when the underlying asset's price is below the strike price.

When an Option Has Intrinsic Value, It Is Said to Be