When the market price of the underlying security exceeds the exercise price, the

Question

Quizplus · Accepted Answer

A call option is considered in the money when the market price of the underlying security is higher than the exercise price because it allows the holder to purchase the underlying security at a lower price than its current market value. This means the holder could exercise the option and make an immediate profit by selling the underlying security at the higher market price.

When the Market Price of the Underlying Security Exceeds the Exercise