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6. At a given moment in time, when an option is in a situation where it is convenient for the holder (long position) to exercise
6. At a given moment in time, when an option is in a situation where it is convenient for the holder (long position) to exercise it, the Option is said to be "In the Money"; when it is not convenient for him to exercise it is said that the Option is "Out the monet"; and in the case of being indifferent between exercising and not exercising, we have the mention of "At the money". Consider a long position in a put option on the US dollar. X=180 and S=185, plus C=$4.00A ) How do you find the option? Hint: when deciding whether or not to exercise, assume economic rationality, that is, you prefer to win money rather than lose, or lose as little as possible. X= Strike price (agreed price) S= Spot Price (Price of the underlying asset in the cash market) C= Commission for opening the Option contract, also known as "premium". A) In the money B) Out of the money C) Overdue D) At the money 6. At a given moment in time, when an option is in a situation where it is convenient for the holder (long position) to exercise it, the Option is said to be "In the Money"; when it is not convenient for him to exercise it is said that the Option is "Out the monet"; and in the case of being indifferent between exercising and not exercising, we have the mention of "At the money". Consider a long position in a put option on the US dollar. X=180 and S=185, plus C=$4.00A ) How do you find the option? Hint: when deciding whether or not to exercise, assume economic rationality, that is, you prefer to win money rather than lose, or lose as little as possible. X= Strike price (agreed price) S= Spot Price (Price of the underlying asset in the cash market) C= Commission for opening the Option contract, also known as "premium". A) In the money B) Out of the money C) Overdue D) At the money
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