Which one of the following stock options is out-of-the-money?
A) Call with a $35 exercise price and a stock price of $36
B) Put with a $40 exercise price and a stock price of $38
C) Call with a $25 exercise price and a stock price of $25
D) Put with a $30 exercise price and a stock price $29
E) Call with a $20 exercise price and a stock price of $19

Question

Quizplus · Accepted Answer

An out-of-the-money option is one that would not make money if it were exercised at the current time. For a call option, this means the stock price is below the exercise price. Option E is a call option with a stock price ($19) below the exercise price ($20), making it out-of-the-money.

Which One of the Following Stock Options Is Out-Of-The-Money