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Glossary of Option Terms: Intrinsic Value
Intrinsic Value
Definition: With options, intrinsic value is the "in the money" part of the option premium. For calls, it's the difference between the underlying stock price and the strike price. For puts, it's the difference between the strike price and the underlying stock price. For both, if the difference is negative between the strike price and the stock price, the value given is zero.
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