Question 2 Why do some stock options have an exercise price which is more than the cost of the stock?

1.These options are put options, giving you the option to sell at a higher price.

2.For call options, this provides the option to buy at this price if the stock goes up before the exercise date.

3.New investors often mistake put and call options, leading to an easy profit for the dealer.

4.The stock options sell for negative prices, because the investor will lose money if the stock price does not fluctuate.