Definition of 'Intrinsic Value'
For example, a call option with a strike price of $45 will have an intrinsic value of $3 if the underlying security is trading at $48. Likewise, a put option with a strike price of $45 will have an intrinsic value of $4 if the underlying security is trading at $41.
Intrinsic Value is one of two components of an option's premium (price). The other component is Time Value.
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