Series 7 - General Securities Representative Exam
If ABC stock is trading at 50, and the January 55 calls are trading at $5.20, which of the following is true regarding the January 55 call?
The intrinsic value is $5.00 and the extrinsic value is .20. The intrinsic value is the difference between the strike price and stock price for an in the money call. The extrinsic value is the remaining option value which is also known as time value