# 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."


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