donwloadimg

Download App

Log in to access Online Inquiry

Options Greeks

Views 46312022.01.20

What is an options' intrinsic value?

By Melody

We are hoping this to be an easy and simple lesson to introduce options to you. By following Options Basics' articles, you should be able to understand options and how to utilize options to either profit or protect your stock. 

Coming into trading options, there are a few new terms that you might want to know. Intrinsic value would be one of them.

In short, intrinsic value is the amount an option is in-the-money. Obviously, only in-the-money options have intrinsic value.

Let's look at an example:

If you look at the screenshot above, the current price of Tesla is $822.99. This means options with strikes lower than $822.99 are in-the-money options. 

If we look at call options with a strike of $800, the intrinsic value of this option is $822.99(current price)-$800(in-the-money strike)=$22.99.

50.pngPlease stay with us for more on options basics!

If there is anything that you didn't understand in today's Options Basics article, simply leave a comment below and we will try to explain more to you!

The content in this article is intended for general circulation and informational purposes only. It does not take into account the investment objectives, financial situation or needs of any particular person and should not be relied on as advice or recommendation. Information provided in this article are not specifically intended for or specially targeted at the public in any specific jurisdiction. Neither Moomoo Inc. nor its affiliates are licensed Financial Advisers and do not provide financial advice. You are advised to consult your financial adviser before making any commitment to invest in any capital markets product. The information published is not and does not constitute or form part of any offer, invitation or solicitation to subscribe or to enter into any transaction in capital markets products. Moomoo is a professional trading app offered by Moomoo Inc. In the U.S., investment products and services on Moomoo are offered by Futu Inc., Member FINRA/SIPC. In Singapore investment products and services are offered through Futu Singapore Pte. Ltd., regulated by the Monetary Authority of Singapore (MAS). This advertisement has not been reviewed by the MAS. Moomoo Inc., Futu Inc. and Futu Singapore Pte. Ltd are affiliated companies. Any illustrations, scenarios, or specific securities referenced herein are strictly for illustrative purposes. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal.

Trade like a pro with moomoo

Get free stock and start your professional trading today

Terms and conditions apply right-arrow

catalog

  • How options work

    • section-img

      What is an options' intrinsic value?

    • section-img

      What is an options' time value (Extrinsic value)?

    • section-img

      Implied Volatility (IV) for trading options

    • section-img

      Meet the Greeks - Delta

    • section-img

      Meet the Greeks - Gamma

    • section-img

      Meet the Greeks - Theta

    • section-img

      Meet the Greeks - Vega, Rho