When the exercise price of an option is equal to the current price of the stock,the option is said to be:
A)at-the-money.
B)in-the-money.
C)out-of-the-money.
D)trading at par.
E)trading below par.

Question

Quizplus · Accepted Answer

When the exercise (strike) price of an option is equal to the current market price of the underlying stock, the option is said to be at-the-money. This means that if the holder of the option decides to exercise it, there would be no profit or loss as the stock price is exactly the same as the strike price.

When the Exercise Price of an Option Is Equal to the Current