Consider a call option on Intel with an exercise price of $25. The current stock price of Intel is $14. What is the intrinsic value of the call option? A. $11. B. $0. C. $25.
The option has an intrinsic value of $0 because the stock price is below the exercise price. The call’s value is MAX (0, S − X). Equivalently, the option is out-of-the-money.
