Intrinsic value of an option

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Intrinsic value of an option

The amount by which an option is in the money. An option that is not in the money has no intrinsic value.

Intrinsic Value of an Option

The profit that an option holder would receive by exercising an in-the-money option. That is, the intrinsic value of an option is how much the strike price is below the underlying asset (for a call) or above the underlying asset (for a put). These options have intrinsic value because they always result in a profit. As a result, they may be sold for a much higher price than the investor paid for the option.