Q23
An option at-the-money when
A.
The strike price is greater than the spot price, in the case of a call option
B.
The strike price is greater than spot price, in the case of a put option
C.
The option has a ready market
D.
The strike price and the spot price are the same
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
An option is at the money (ATM) if the strike price is the same as the current spot price of the underlying security. An at-the-money option has no intrinsic value, only time value. For example, with an "at the money" call stock option, the current share price and strike price are the same.