If a stock's price is above the strike price of a call option written on the stock, then the exercise value is equal to the stock price minus the strike price.If the stock price is below the strike price, the exercise value of the call option is zero.

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Quizplus · Accepted Answer

This is because a call option gives the holder the right, but not the obligation, to buy the underlying stock at the strike price. Therefore, if the stock is trading above the strike price, it makes sense to exercise the option and buy the stock at a lower price. The difference between the stock price and the strike price is the exercise value. If the stock is trading below the strike price, there is no benefit to exercising the option and the exercise value is zero.

If a Stock's Price Is Above the Strike Price of a Call