An investor buys a European put on a share for $3. The stock price is $42...
An investor buys a European put on a share for $3. The stock price is $42 and the strike price is $40.
Is in the option in the money or out the money? Explain
Homework Answers
A put option is in the money if it has intrinsic value. If the underlying share price is less than the strike price, it means there is intrinsic value. Here stock price (42) > strike price (40) and therefore is out of the money.
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An investor buys a European put on a share for $3.
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