The value of a call option _______ and the value of a put option with the same price and expiration date _______ when the spot price of an underlying increases.

Question

Quizplus · Accepted Answer

The value of a call option increases because the right to buy at a fixed price becomes more valuable as the spot price rises. Conversely, the value of a put option falls because the right to sell at a fixed price becomes less valuable as the spot price rises.

The Value of a Call Option _______ and the Value