Probability That an Option Expires in the Moneydoi:10.1002/9781119209089.app1Frans de WeertJohn Wiley & Sons, Inc.
The cash-or-nothing is a binary option where you get paid in cash when the option expires in the money. This is by far the most common binary option. With an asset-or-nothing, you get the value of the underlying asset if the option expires in the money. So, if the underlying asset...
What happens if my call option expires in the money? If it expires and you did not claim your shares, you end up losing the premium paid and any fees involved. If you had any reason for not buying the stock before expiration and being in the money, you could have sold the option con...
The most likely set of price changes occurs around the ATM point and hence ATM options have a delta of 0.50; at this point there is a 50% chance of the stock being above this point by the time the option expires. If the stock has a higher distribution of daily returns (higher volatili...
The option expires in-the-money whenever the exchange rate at expiration is above the strike price, i.e. at all points right of the strike price (assuming the exchange rate is on a graph's horizontal axis). The mathematical derivation of this result is straightforward. Under risk neutrality...
of 0.40 is taken to mean that at that moment in time, the option has about a 40% chance of being ITM at expiration. This doesn't mean higher-Delta options are always profitable. After all, if you paid a large premium for an option that expires ITM, you might not make any money. ...
Based on the type of the option, the relation to the strike, and where the spot rate is trading, the option is either exercised or it becomes worthless at the expiry date. The currency option can also be settled for money if the option expires in the mon...
3. option量竡
These options depend on the outcome of a "yes or no" proposition, hence the name "binary." Traders receive a payout if the binary option expires in the money and lose if it expires out of the money. In 2008, the U.S. Securities and Exchange Commission (SEC) approved listing binary o...
Asset-or-nothing put options settle with the physical delivery of the underlying asset if the option expires in the money. These binary options pay a predetermined payout, or else or zero at expiration. Asset-or-nothing options can be a simplified risk hedge. Understanding Asset-or-Nothing Put...