Answer: out of the money.

## Explanation For a **put option**: - **In-the-money (ITM)**: When the underlying asset price is **less than** the exercise price (strike price). The put option has intrinsic value because the holder can sell the asset at a higher price than the market price. Formula: Underlying Price < Exercise Price - **At-the-money (ATM)**: When the underlying asset price is **equal to** the exercise price. - **Out-of-the-money (OTM)**: When the underlying asset price is **greater than** the exercise price. The put option has no intrinsic value because the holder would not exercise the right to sell at a lower price than the market price. Formula: Underlying Price > Exercise Price **Given in the question**: - Price of the underlying > Exercise price - This matches the **out-of-the-money** condition for a put option **Example**: - Put option with strike price = $50 - Current underlying price = $60 - The put is **out-of-the-money** because you wouldn't exercise the right to sell at $50 when you could sell at $60 in the market. **Key Concept**: For put options, the relationship is opposite to call options: - Call option: ITM when Underlying Price > Exercise Price - Put option: ITM when Underlying Price < Exercise Price

Author: LeetQuiz .