Give a Practical Example of an ITM Bitcoin Call Option ▴ Learn

Give a Practical Example of an ITM Bitcoin Call Option.

Assume the current market price of Bitcoin (BTC) is $45,000. A trader holds a BTC Call option with a strike price of $42,000.

Since the BTC price ($45,000) is higher than the strike price ($42,000), this Call option is In-the-Money. Its intrinsic value is $3,000.

The holder can potentially buy BTC at $42,000 and immediately sell it at $45,000, making a profit before considering the premium paid.

What Is the Difference between an “In-the-Money” (ITM) Call Option and a Put Option?

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