Check out our blog on the first 10 characteristics of stock options.
Here are some additional characteristics of stock options.
- In-the-Money: strike price is less than the current underlying stock price (calls… inverse is true for puts)
- At-the-Money: strike price is identical to (or near) the equity price
- Out-of-the-Money: strike price is greater than the current underlying stock price (calls… inverse is true for puts)
- Theta: time value of the option.
This extrinsic value erodes exponentially as it nears expiration.
- Delta: change in option vis a vis change in the underlying stock.
This percentage increases further ‘in the money’
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