If the spot price is higher than the strike price for a put option, it is said to be:
Question
If the spot price is higher than the strike price for a put option, it is said to be:
Solution
The put option is said to be "out of the money". This is because the spot price (the current market price) is higher than the strike price (the price at which the option holder can sell the asset). If the holder were to exercise the option, they would be selling the asset for less than its current market value, which is not beneficial. Therefore, the option is considered "out of the money".
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