# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Intrinsic Value

The intrinsic value is the value that the option would pay if it were executed today. For example, if a stock is trading at $40, a call on that stock with a strike price of $35 would have $5 of intrinsic value ($40-$35) if it were exercised today. However, the call should actually be worth more than $5 to account for the value of the chance of any further appreciation until expiration, and the difference between the price and the intrinsic value would be the "time value."

 

Sponsors Center
Sponsored Links