A currency call option is in-the-money when the exercise price is less than the underlying exchange rate.

Question

Quizplus · Accepted Answer

A currency call option gives the holder the right, but not the obligation, to buy a currency at a predetermined exchange rate (the exercise price) on or before the expiration date of the option. If the exercise price is lower than the underlying exchange rate, it is profitable for the holder to exercise the option and buy the currency at a lower rate, hence the option is in-the-money.

A Currency Call Option Is In-The-Money When the Exercise Price