What’s the Intrinsic Value Hiding Inside Your Option? | #OptionsHandbook EP011
Intrinsic Value reflects the actual value if the option were exercised. It’s simply the difference between the stock price and the strike price.
📈 For example:
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You hold a Call option with a strike price of $80.
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If the stock is now trading at $100, you could make a $20 profit by exercising it right away.
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That $20 is the intrinsic value.
📘 Based on intrinsic value, options fall into 3 types. Here’s how the Options Handbook explains it:
▶ In the Money (ITM) 💰
If exercising the option earns you money, it's in the money—meaning it has intrinsic value. Already valuable, with more upside if the move continues.
▶ At the Money (ATM) ⚖️
If the strike price is equal to (or very close to) the stock price, there's no profit to be made. Intrinsic value = 0.
▶ Out of the Money (OTM) 🚫
If a Call’s strike is above the current stock price, or a Put’s strike is below, you can’t make money by exercising. Intrinsic value = 0.
You don’t need to calculate this manually; pricing platforms typically handle it for you！
In the Tiger Trade app, swipe toward the centre of the options chain, you'll see both intrinsic and time values listed clearly.
🎁 The Options Handbook also includes practical strategies—perfect for both beginners and advanced traders! Act fast! Grab them while they last! Now available in the Tiger Coin Center! 🐯✨
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