When a call option is exercised, how is the intrinsic value calculated?

The intrinsic value of a call option is calculated by taking the current market price of the underlying asset and subtracting the strike price of the option. This calculation reflects the profit that the holder of the option would realize if they chose to exercise it at that moment. If the call option's strike price is lower than the current market price, the intrinsic value will be positive, indicating that the option is in-the-money. If the strike price is higher than the current market price, the intrinsic value will be zero, as it would not be beneficial to exercise the option.

This understanding is fundamental in options trading, as it helps investors determine the value and potential profitability of exercising their options. It does not involve the total market price of the shares or any self-assessed metrics, which distinguishes it from the other choices presented.