Moneyness

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Definition of “Moneyness” :

“Moneyness” refers to the relationship between the price of an underlying asset and the strike price of a derivative, such as an option. In the South African finance context, if the asset’s price is above the strike price, the option is ‘in the money’. If it’s below, the option is ‘out of the money’. If both prices are equal, it’s ‘at the money’. This concept helps investors decide which options to buy or sell.

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