Where an option is out of the money

Name: Where an option is out of the money
Brand: Quizplus
Rating: 4.9 (39 reviews)

Question

Quizplus · Accepted Answer

When an option is out of the money, it means that exercising the option would not be profitable for the holder. In such cases, the option is often not exercised, and the seller (or writer) of the option retains the premium paid by the buyer as profit. The premium is not refunded to the buyer, and the buyer can still choose to exercise the option, although it would result in a loss compared to not exercising.

Where an Option Is Out of the Money