If an option is described as 'in-the-money', what does that mean? The holder of the option is worse off if they exercised the option instead of making the same transaction on the stock exchange The option was purchased instead of being issued at no cost The holder of the option is better off exercising the option, compared to making the same transaction on the stock exchange The fair value of the option, as determined using the Black-Scholes method, is greater than the underlying security.

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An inthemoney option is one that has a positive intrinsic value This means that the holder of the o... View the full answer