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What Is the Formula for Calculating the Intrinsic Value of an ITM Call Option?

Intrinsic Value = (Underlying Price - Strike Price). If the result is negative, the value is zero.
Greeks.Live07.11.25

What Is the Formula for Calculating the Intrinsic Value of an ITM Call Option?

The intrinsic value of an In-the-Money (ITM) Call Option is calculated by subtracting the option's strike price from the current market price of the underlying asset. The formula is: Intrinsic Value = (Underlying Price – Strike Price).

If the result is negative or zero, the intrinsic value is zero, meaning the option is Out-of-the-Money (OTM) or At-the-Money (ATM).

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