A call option in which the stock price is higher than the exercise price is said to be
A) at-the-money.
B) in-the-money.
C) before-the-money.
D) out-of-the-money.
E) above-the-money.

Question

Quizplus · Accepted Answer

In-the-money options have an exercise price that is lower than the current stock price, allowing the holder to exercise the option and sell the stock at a profit. Out-of-the-money options have an exercise price that is higher than the current stock price and do not have any intrinsic value. At-the-money options have an exercise price that is equal to the current stock price. "Before-the-money" and "above-the-money" are not terms typically used in options trading.

A Call Option in Which the Stock Price Is Higher