A put option has a strike price of $35 and a stock price of $38. If the put option is trading at $1.25, what is the time value embedded in the option?
A) $0
B) $0.75
C) $1.25
D) $3

Name: A put option has a strike price of $35 and a stock price of $38. If the put option is trading at $1.25, what is the time value embedded in the option? A) $0 B) $0.75 C) $1.25 D) $3
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Question

Quizplus · Accepted Answer

Since the put option is out of money, intrinsic value is zero and option premium = time value.

A Put Option Has a Strike Price of $35 and a Stock