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Any time an option has bargain for better intrinsic value it is claimed to be “in the money” if your intrinsic value is negative then the alternative is regarded as “out belonging to the money”. It is possible to have a value of zero which implies that the current price comes to the strike price in that case it is regarded as “a the money”. Options should only be exercised should they be “in the money”.
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Why options are important as a risk management tool? Suppose a Japanese clients are going to cause the payment for its import of unprocessed trash in 3 months time in $.
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