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Chapter 1.2 – In the money; Out of the money concept

An option is outlined by means of its kind (call or put, but more on this on the following chapter) and the strike price. A call option is regarded as to be in the money when the strike value is below the spot value. the alternative could be very so much proper, a put possibility is regarded as to be within the money when the strike price is above the spot worth. An out of the money name possibility implies a stripe price above the spot value at expiration, and an out of the cash put choice implies a strike value beneath the spot price at expiration.

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