If the price of a stock is less than the strike price, a call has no intrinsic value (that is, out of the money).

Name: If the price of a stock is less than the strike price, a call has no intrinsic value (that is, out of the money).
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Question

If the price of a stock is less than the strike price, a call has no intrinsic value (that is, out of the money).​

Quizplus · Accepted Answer

This is because a call option gives the holder the right to buy the underlying stock at the strike price, so it only has intrinsic value if the stock price is higher than the strike price.

If the Price of a Stock Is Less Than the Strike