When are call options considered in-the-money?

Call options are considered in-the-money when the market price of the underlying stock is greater than the strike price. This scenario indicates that the holder of the call option has the right to purchase the stock at a lower price (the strike price) than its current market value. This situation creates intrinsic value for the call option, as exercising the option would result in an immediate profit by buying at a lower price and potentially selling at a higher market price.

Understanding the relationship between the market price and the strike price is critical for call options. In-the-money status is an important concept for traders and investors because it signifies that the option has value and could be advantageous to exercise or sell. This basic principle is integral to options trading strategies and pricing.