Criteria for Identifying Appropriate Option Strategies

Hi to everybody,

I really don’t understand this sentence which comes from the curriculum: « This is because in the put bear spread, the lower exercise price, more OTM (but relatively more expensive) put is sold and the higher exercise price, nearer-to-the-money (but relatively less expensive) put is purchased. »

How can an OTM put be more expensive and an ATM put be less expensive?

Thank you.

Sounds wrong to me.

Did you check the errata?


Thank you for your answer. No I did not. Maybe because we are selling the option OTM this could be more expensive, because we sold it at a lower price (then more expensive). I am going to check. Still 4 day till the exam. Thanks again.