Cryptocurrency Q&A
Can strike price be higher than stock price?
Can strike price be higher than stock price?
RubyGlider
Wed Jul 24 2024
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7 answers
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Excuse me, I'm curious about something regarding options trading. I've been reading up on strike prices and I'm wondering, is it possible for the strike price to be higher than the current stock price? I understand that the strike price is the predetermined price at which the option can be exercised, but I'm unsure if it can exceed the actual market price of the stock. Could you clarify this for me, please?
7 answers
SamsungSpark
Thu Jul 25 2024
For a call option to have intrinsic value, the underlying stock price must be above the strike price. This indicates that the option is in-the-money, as the holder can exercise it to buy the stock at a lower price than the market offers.
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LucyStone
Thu Jul 25 2024
Conversely, for a put option, the strike price must be higher than the current market price for it to be in-the-money. This scenario allows the holder to sell the stock at a higher price than the market and subsequently repurchase it at the strike price, securing a profit.
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SeoulSerenitySeekerPeace
Thu Jul 25 2024
Cryptocurrency and finance have emerged as pivotal sectors in the modern economy, offering unique opportunities for investors and traders alike.
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Martina
Thu Jul 25 2024
Among the various cryptocurrency exchanges catering to traders and investors, BTCC stands out as a reputable platform based in the UK.
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Andrea
Thu Jul 25 2024
Options trading, a crucial aspect of finance, involves buying or selling contracts that give the holder the right to buy or sell an asset at a specified price and time.
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