What is the intrinsic value of an option?

"The price paid for the option contract" "The potential profit from exercising the option" "The difference between the strike price and the market price" "The time value remaining until the option expires"

Which of the following statements about intrinsic value is true?

"Intrinsic value can be negative for both call and put options" "Intrinsic value is always positive for call options but can be negative for put options" "Intrinsic value is always positive and can never be negative" "Intrinsic value is only relevant for options that are in the money"

How is the intrinsic value of a call option calculated?

"Strike Price - Spot Price" "Spot Price - Strike Price" "Spot Price x Strike Price" "Spot Price / Strike Price"

How is the intrinsic value of a put option calculated?

"Strike Price - Spot Price" "Spot Price - Strike Price" "Spot Price x Strike Price" "Spot Price / Strike Price"

What does it mean for an option to be 'In the Money' (ITM)?

"The option has no intrinsic value" "The option has a high premium" "The option would result in a profit if exercised immediately" "The option is close to its expiration date"

What does it mean for an option to be 'Out of the Money' (OTM)?

"The option has no intrinsic value" "The option has a low premium" "The option would result in a loss if exercised immediately" "The option is far from its expiration date"

What is the relationship between the strike price and the moneyness of a call option?

"All strikes lower than the ATM strike are considered OTM" "All strikes higher than the ATM strike are considered ITM" "All strikes lower than the ATM strike are considered ITM" "The strike price does not affect the moneyness of a call option"

What is the relationship between the strike price and the moneyness of a put option?

"All strikes lower than the ATM strike are considered OTM" "All strikes higher than the ATM strike are considered ITM" "All strikes lower than the ATM strike are considered ITM" "The strike price does not affect the moneyness of a put option"

What is an Option Chain?

"A list of all available options contracts for a particular underlying asset" "A graph showing the historical prices of an option contract" "A formula for calculating the theoretical value of an option" "A trading strategy involving multiple option contracts"

Which of the following is NOT typically included in an Option Chain?

"Premium price" "Bid-ask price" "Open interest" "Historical volatility"