“If most of the call options on a stock are in the money, it is likely that the stock price has risen rapidly in the last few months.” Discuss this statement
“If most of the call options on a stock are in the money, it is likely that the stock price has risen rapidly in the last few months.” Discuss this statement
Call options are derivatives contracts that give the holder the right, but not the obligation, to buy a predetermined number of shares of the underlying stock at a predetermined price (known as the strike price) within a specified period of time (the expiration date). If the current market price of the underlying stock is greater than the strike price of the call option, then the option is said to be “in the money”. In this Artical, we will discuss what could be causing this rapid rise in the stock price and why it is likely that the price has increased so quickly.
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