Options Pricing
A call option with a strike price of $50 when the stock is trading at $58 has an intrinsic value of:
Call intrinsic value = Stock Price - Strike (if positive). Put = Strike - Stock (if positive).
Complete Analysis & Legal Rationale
Intrinsic value for a call option equals the stock price minus the strike price, when positive. With a $50 strike and $58 stock price: $58 - $50 = $8 intrinsic value. The call is $8 in-the-money.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
$0 would only apply if the stock were at or below the $50 strike price.
Matches the verified teaching point in the explanation.
$50 is the strike price, not the intrinsic value.
$58 is the stock price, not the intrinsic value.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.