You own two call option contracts on ABC stock with a strike price of $15.When you purchased the contracts the option price was $1.20 and the stock price was $15.90.What is the total intrinsic value of these options if ABC stock is currently selling for $14.50 a share?
A)$280
B)$180
C)$100
D)$0
E)$29

Question

Quizplus · Accepted Answer

The intrinsic value of a call option is calculated by subtracting the strike price from the current stock price. In this scenario, the strike price is $15 and the current stock price is $14.50. Therefore, the intrinsic value of each option is $0. Since there are two option contracts, the total intrinsic value is $0. Option prices may also have extrinsic value, which is influenced by factors such as time until expiration and market volatility, but this information is not given in the question.

You Own Two Call Option Contracts on ABC Stock with a Strike