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Intrinsic value

The part of an option’s price that is already "real" — how far it is in the money right now.

Intrinsic value is the part of an option's premium that would still be worth something if the option expired right now. For a call, it's how far the stock sits above the strike; for a put, how far below. Everything else you pay is time value, which decays as expiration approaches.

Say a stock trades at 108 and you hold a 100 call. That option has 8 of intrinsic value, because you could exercise and buy at 100 what's worth 108. If the same call costs 11 in the market, the extra 3 is time value. An out-of-the-money option has zero intrinsic value; its entire premium is time and volatility.

A common mistake is thinking a cheap option is a bargain. If it's all time value, it can expire worthless even when you were right about direction but not about timing or magnitude. Checking intrinsic value tells you how much of your premium is real equity today versus a bet on what happens next.

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Call Put Strike price Premium Expiration In the money (ITM)At the money (ATM)Out of the money (OTM)Time value (extrinsic)Delta Gamma Theta Vega Implied volatility (IV)Open interest Assignment Exercise Spread Break-even Probability of profit (POP)Assignment risk / early assignment LEAPS Naked (uncovered) option Rho Historical volatility (HV)Volume Bid-ask spread Moneyness Covered call Cash-secured put Vertical spread Iron condor Straddle Strangle Rolling Margin Max pain American-style option European-style option Contract multiplier Debit vs credit Volatility skew The Greeks Underlying Hedge Leverage Expected move Notional value Protective put Collar Butterfly spread Iron butterfly Calendar spread Diagonal spread Credit spread Debit spread Bull call spread Bear put spread Ratio spread Synthetic position The wheel strategy Poor man’s covered call (PMCC)Box spread Put-call parity Pin risk IV crush IV rank / IV percentile Ex-dividend date Deep in the money Weeklys 0DTE (zero days to expiration)Order types (to open / to close)Buying power reduction Cash settlement Market maker Slippage Mid price Black-Scholes model

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.