A put option with a strike price of $10 is trading at a price of $3....
A put option with a strike price of $10 is trading at a price of $3. The price of the underlying asset is $9.5. What is the time value of this option?
Homework Answers
Given that the price of the underlying asset is $9.5 which is
less than the strike price of $10. So, the intrinsic value of the
bond is 0.
Option price=Intrinsic value + Time value
=>3=0 + Time value
So,the time value of the option is 3
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A put option with a strike price of $10 is trading at a price of
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