If the price of the common stock exceeds the exercise price of a call,the call is said to be:

Question

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When the price of the common stock exceeds the exercise price of a call, the call is said to be "in the money." This means that the option holder can buy the stock at a lower price than its current market value, resulting in a profit. A naked call means that the option writer does not own the underlying stock, and it carries a high risk. Out of the money calls have an exercise price higher than the current stock price, while covered calls means that the option writer owns the underlying stock.

If the Price of the Common Stock Exceeds the Exercise