The ________ is fixed for the life of the option. All other factors equal, the lower the strike price, the ________ the price for a call option. For put options, the ________ the exercise price, the higher the option price.

Question

Quizplus · Accepted Answer

The strike price (or exercise price) is fixed for the life of the option. For call options, the lower the strike price, the higher the price of the option because it's more likely to end in the money. For put options, the higher the strike price, the higher the option price for the same reason.

The ________ Is Fixed for the Life of the Option