Calls tend to sell for a time premium that exceeds the stock's price.

Name: Calls tend to sell for a time premium that exceeds the stock's price.
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Question

Quizplus · Accepted Answer

Calls typically sell for a time premium, but this premium does not exceed the stock's price. The time premium is an additional cost on top of the intrinsic value (if any) of the call option, reflecting the time left until expiration and the volatility of the stock, among other factors.

Calls Tend to Sell for a Time Premium That Exceeds