Fm9 6 - 10 An in-the-money call is a call option whose strike price is less than the current price of the underlying stock 11 An out-of-the-money

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Mini Case: 9 - 6 7. The exercise value is the value of a call option if it were exercised today, and it is equal to the current stock price minus the strike price. Note: the exercise value is zero if the stock price is less than the strike price. 8. A covered option is a call option written against stock held in an investor's portfolio. 9. A naked option is an option sold without the stock to back it up.
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Unformatted text preview: 10. An in-the-money call is a call option whose strike price is less than the current price of the underlying stock. 11. An out-of-the-money call is a call option whose strike price exceeds the current stock price. 12. LEAPS stands for long-term equity anticipation securities. They are similar to conventional options except they are long-term options with maturities of up to 2½ years....
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

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