What is the probability of an at-the- money option being exercised?
A) Less than 50% probability
B) 50% probability
C) More than 50% probability
D) Zero probability

Question

Quizplus · Accepted Answer

An at-the-money option has a 50% probability of being exercised because the underlying asset's price is equal to the option's strike price, making it equally likely to move above or below the strike price.

What Is the Probability of an At-The- Money Option Being