An option granting the right to sell a stock at $10 when that stock currently has a market price $8 is "in the money."

Name: An option granting the right to sell a stock at $10 when that stock currently has a market price $8 is "in the money."
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An option is "in the money" if exercising it would result in a profit. A put option allows selling at a higher price ($10) than the current market price ($8), thus it is "in the money".

An Option Granting the Right to Sell a Stock at $10