If the strike price for a call option is $10 and the current asset price is $9, the intrinsic value is ________.

Question

Quizplus · Accepted Answer

The intrinsic value of a call option is the difference between the stock price and the strike price, only if the stock price is higher than the strike price. In this scenario, the stock price is $9 and the strike price is $10, so the intrinsic value is $0. However, if the stock price were to rise to $11, the intrinsic value would be $1 ($11 - $10). Since the current stock price is below the strike price, there is no intrinsic value.

If the Strike Price for a Call Option Is $10