New Terms
- Time Value
- The portion of an options premium that is attributed to the option may gain value in the remaining time before it expires.
Intrinsic Value- The portion of an options premium that is attributed to the value that could currently be realized by exercising and simultaneously closing out the position in the open market.
In-the-Money- Call options: The underlying stock price is above the option strike price.
Put options: The underlying stock price is below the option strike price.
(Options with intrinsic value are in-the-money.)
At-the-Money- For both calls and puts the option strike price is at or near the underlying stock price.
Out-of-the-Money- Call options: The underlying stock price is below the option strike price.
Put options: The underlying stock price is above the option strike price.
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