An option with a higher exercise price has a higher call option premium and a lower put option premium.

Question

Quizplus · Accepted Answer

The premium of an option is influenced by various factors including the exercise price, but a higher exercise price does not universally mean a higher call option premium or a lower put option premium. For call options, a higher exercise price generally leads to a lower premium, as the option is less likely to be in-the-money. For put options, a higher exercise price can lead to a higher premium, as the option is more likely to be in-the-money.

An Option with a Higher Exercise Price Has a Higher