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This is a homework question, but can explain to me how to determine "in-the-money" vs "out-of-the-money" call options based on the table below?

enter image description here

The image above is a newspaper style quote. The first 3 lines are a snapshot taken on Oct 20th, the latter 3, on Nov 17. Intel closed at $23.34 on 10/20 and at $25.18 on Nov 17. Instead of a list of expirations and strikes, the paper printed 2 strikes (for Jan) and 2 expirations (for the $25 strike) for both calls and puts. There's no bid/ask, just the last trade.

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First, welcome to Money.SE. The selected page is awful. I don't know the value in listing different expirations at the same strike. Usually, all the strikes are grouped by month, so I'd be looking at Jan '15 across all strikes.

"In the money" means the price of a stock is trading above the strike price, if a call, or below it, if a put.

On 10/20 of some year, Intel was trading at $23.34. The January $25 call strike was just $0.70, and April's was $1.82. These were out of the money. The $25 puts were "in the money" by $1.66 so you could have paid $1.90 for the Jan $25 put, with $.24 of time premium.

By November, the price rose and the put fell, to $.85, all time premium.

As with stocks, the key thing is to only buy calls of stock that are going to go up. If a stock will fall, buy puts.

Curious, what was the class discussion just before the teacher gave you this image?

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  • Thanks, I think I understand. And as for class discussion, this is a strictly online class which makes it even more difficult as I have no investment background.
    – MISNole
    Dec 1, 2014 at 18:39
  • Option pricing also involves volatility and time among other greeks. You can be right on the price direction but if volatility falls option price falls
    – ericgu
    May 28, 2020 at 14:05

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