The real and out-of-value options refer to the relationship between the exercise price of the option and the price of the underlying asset.
For call options, in-the-money options refer to situations where the exercise price is lower than the underlying asset price, and out-of-the-money options refer to situations where the exercise price is higher than the underlying asset price.
For put options, in-the-money options refer to situations where the exercise price is higher than the price of the underlying asset, while out-of-the-money options refer to situations where the exercise price is lower than the price of the underlying asset.
The value of a real-the-money option consists of its intrinsic value and time value, while an out-of-the-money option only has time value. The intrinsic value of a real-money option refers to the value that can be obtained by immediately exercising the option under current market conditions, that is, the price of the underlying asset minus the exercise price. Time value refers to the remaining value of the option value after excluding the intrinsic value, which is mainly determined by factors such as option expiration time and volatility. Since in-the-money options have intrinsic value, their prices are higher, while out-of-the-money options have only time value, so their prices are lower.
Understanding the concepts of in-value and out-of-the-money value can help options traders better understand the price and value of options, and thus conduct better options trading. Traders can decide whether to buy an option based on its real value and virtual value, and how to combine options to achieve the best results from options trading. At the same time, understanding real and virtual values ??can also help traders identify opportunities and risks in the market, as well as conduct risk management and arbitrage.