When Is a Put Option Considered to Be “In the Money”?
A put option is the opposite of a call option. The holder has the right but not the obligation to buy an underlying security at a specified strike price before it reaches its expiration date in the case of a call option. A put option gives the holder the right but not the obligation to sell a certain amount of the underlying asset or security by the expiration date at a certain price. A put that’s in the money has intrinsic value.
Investing can be a very rewarding experience but it can be a little daunting, not to mention intimidating, with all the options out there. Most investors start with stocks, bonds, and mutual funds because they’re the simplest and most common vehicles from which to choose. Other investments require a…
