Intrinsic Value
Intrinsic value is max(S−K,0) for calls and max(K−S,0) for puts. Premium minus intrinsic value is extrinsic value, which reflects more than time alone.
Strategy Lab ↗Intrinsic value is max(S−K,0) for calls and max(K−S,0) for puts. Premium minus intrinsic value is extrinsic value, which reflects more than time alone.
Strategy Lab ↗