GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If Strike price is more than the spot price of the asset, the call option is known as
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European Option
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American Option
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In the Money Option
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Out of Money Option
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Explanation:
Detailed explanation-1: -"Out of the money” (OTM) is an expression used to describe an option contract that only contains extrinsic value. These options will have a delta of less than 0.50. An OTM call option will have a strike price that is higher than the market price of the underlying asset.
Detailed explanation-2: -For buyers of the call option (such as in the example above), if the strike price is higher than the underlying stock price, the option is out-of-the-money (OTM).
Detailed explanation-3: -In the case of a Call Option, if the spot price is more than the strike price, then the Option contract is said to be In-the-Money(ITM).
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