Definition - The fixed price at which the owner of an option can purchase, in the case of a call, or sell, in the case of a put, the underlying security or commodity.
Moneyness is a term describing the relationship between the strike price of an option and the current trading price of its underlying security. Where settlement is financial, the difference between the strike price and the spot price will determine the value, or "moneyness", of the contract.
In options trading, terms such as in-the-money, at-the-money and out-of-the-money describe the moneyness of options.
A call option has positive monetary value when the underlying has a spot price (S) above the strike price (K). Since the option will not be exercised unless it is "in-the-money", the payoff for a call option is
also written as
Upward Stock Option Repricing: Companies Often Reduce the Exercise Price of Employees' Outstanding Stock Options to the Current Stock Price to Restore the Options' Incentive Effect and Retain Talented Employees. However, in Some Cases Companies Raise the Exercise Price to Provide Tax Benefits for Option Holders under Certain Circumstances
Sep 01, 2011; [ILLUSTRATION OMITTED] If a stock option qualifies as an incentive stock option (ISO) under IRC [section][section] 422 and 409A,...