Near The Money
Categories: Derivatives, Trading
You bought a call option on KO for a dollar with strike $55. The stock is now $54.23. It is near the money, i.e., near the strike price of the stock.
Why is this a Thing? Well, when stocks get near the money, the value of that option then becomes dramatically more valuable than it was (usually) when prices were far away from the "money," or the srike price.
Lots of volatility. Lots of risk. Caveat Emptor.