Chapter 02 · Section 2.1

Exercising Options-3

Suppose you are the holder of a PHLX DM put option

You will most likely exercise your put when the option is:

a) out-of-the-money.
• b) at-the-money.
  No. When a put option is at-the-money, the price of the underlying asset is equal to the exercise price. Therefore you probably will not exercise it.
  c) in-the-money.

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