If ABC stock is trading at $25.75 and ABC July 25 calls are trading at a premium of $2, what is the intrinsic value of these calls?

The intrinsic value of a call option is determined by the difference between the current price of the underlying stock and the strike price of the option, provided that this difference is positive. In this case, the stock price for ABC is $25.75 and the strike price for the July 25 calls is $25.

To calculate the intrinsic value, you subtract the strike price from the current stock price:

$25.75 (current stock price) - $25 (strike price) = $0.75.

This indicates that the calls are in-the-money by $0.75. To find the intrinsic value in dollar terms, you multiply the intrinsic value per share by the number of shares represented by a standard option contract, which is typically 100 shares:

$0.75 * 100 shares = $75.

Therefore, the intrinsic value of the ABC July 25 calls is indeed $75, making this the correct answer. This intrinsic value reflects the immediate profit an option holder would realize if they exercised the option at that moment.