Which one of the following options is in the money?
A)call with a $45 strike and an underlying stock price of $42
B)put with a $35 strike and an underlying stock price of $36
C)call with a $15 strike and an underlying stock price of $15
D)put with a $45 strike and an underlying stock price of $42
E)call with a $30 strike and an underlying stock price of $29

Question

Quizplus · Accepted Answer

An option is "in the money" if exercising it would result in a profit based on the current price of the underlying asset. For a put option, this means the strike price is above the underlying stock price. Option D, a put with a $45 strike and an underlying stock price of $42, is in the money because exercising it would allow the holder to sell shares at $45 that are currently worth $42 in the market.

Which One of the Following Options Is in the Money