Chapter 03 · Section 3.1
Out-of-the-money call option
An out-of-the-money call option has:
a) a premium higher than the price of the underlying asset.
b) a premium lower than the price of the underlying asset.
c) an exercise price higher than the price of the underlying asset.
d) an exercise price lower than the price of the underlying asset.
e) a positive time value.
An in-the-money option, call or put, has intrinsic value. An out-of-the-money option, call or put, has no intrinsic value. An at-the-money option, call or put, has an intrinsic value equal to zero.