answersLogoWhite

0

What else can I help you with?

Continue Learning about Finance

Can you explain what fast cash means when using an ATM?

Fast cash at an ATM refers to the option to quickly withdraw a preset amount of money without having to go through the usual steps of entering the desired withdrawal amount. This feature is convenient for those who frequently withdraw the same amount of cash.


What are the key differences between a European option and an American option?

The main difference between a European option and an American option is the exercise or strike price. In a European option, the option can only be exercised at the expiration date, while in an American option, the option can be exercised at any time before the expiration date.


How is the option premium taxed?

The option premium is taxed as a capital gain when the option is sold or expires.


How do you determine whether the currency option is in the money?

"In the Money" is a term used in option trading as a determinate to if an option has "Intrinsic Value." In the Money, does NOT mean in profit. There are two components to an option value, TIME VALUE, and INTRINSIC VALUE. Time Value + Intrinsic Value = Option Premium. When the market price is above the option strike price of a CALL option, that option is considered "In the Money" i.e. having intrinsic value. When the market price is below the option strike price of a PUT option, that option is considered "In the Money" i.e. having intrinsic value.


How can one exercise a call option?

To exercise a call option, the option holder can buy the underlying asset at the strike price before the option's expiration date.