™A $50 strike call with the stock at $55 has $5 intrinsic value. Being in the money does not itself mean the buyer has recovered the premium.
Options
In the money (ITM)
An option with intrinsic value based on the relationship between strike and underlying price.
Plain-English context
Put the definition to work.
Intrinsic value is not net profit after premium and costs; exercise can create further exposure.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. OCC / Options Industry Council — options basics