How Is the Intrinsic Value of an ITM Call Option Calculated? ▴ Learn

How Is the Intrinsic Value of an ITM Call Option Calculated?

The intrinsic value of an ITM Call option is calculated by taking the underlying asset's current market price and subtracting the option's strike price. For example, if Bitcoin is at $40,000 and the Call strike is $38,000, the intrinsic value is $2,000.

This value represents the immediate profit if the option were exercised. Intrinsic value cannot be negative; if the result is negative, the intrinsic value is zero.

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