How Does Changing the Strike Price Affect the Premium of a Call Option? ▴ Learn

How Does Changing the Strike Price Affect the Premium of a Call Option?

For a call option, lowering the strike price increases the option's premium, all else being equal. A lower strike price means the option is closer to or further into the 'in-the-money' region, making it more valuable as the potential profit is higher and the chance of being profitable is greater.

Conversely, raising the strike price lowers the premium.

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How Does a Change in the Risk-Free Interest Rate Affect the Premium of a Call Option?