A high spot price relative to the strike price will result in a relatively high premium for a call option and a relatively high premium for a put option.

Question

Quizplus · Accepted Answer

A high spot price relative to the strike price will result in a relatively high premium for a call option because the option is more likely to end in the money, but it will result in a relatively low premium for a put option, as the option is less likely to be exercised profitably.

A High Spot Price Relative to the Strike Price Will