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What is the difference between spot price, strike price and exercise price?
Thanks for explaining that. Are these prices important in options trading?
Yes, they are crucial concepts in options trading. The relationship between the spot price and the strike price determines whether an option is in-the-money, at-the-money, or out-of-the-money. Options that are in-the-money have intrinsic value, while those that are at-the-money or out-of-the-money have no intrinsic value.