The intrinsic value of a call is always equal to zero if the call is currently out of the money.

Question

Quizplus · Accepted Answer

The intrinsic value of a call option is the difference between the underlying stock's price and the strike price of the call, but only when the stock's price is above the strike price. If the call is out of the money (meaning the stock's price is below the strike price), the intrinsic value is zero because the option holder wouldn't exercise the option to buy at a higher price than the current market price.

The Intrinsic Value of a Call Is Always Equal to Zero