What is intrinsic value?Intrinsic Value

What you'd get by exercising right now; for a call, max(stock price − strike, 0).

Learn “intrinsic value” in an animated lesson

Options Basics
Call Options
Buying a call: pay a premium to lock in the right to buy at the strike. Drag the price at expiration and watch the payoff curve "bend".
Options Basics
Intrinsic Value and Time Value
An option's price splits into two parts: what it's worth right now, and what it's worth because there's still time left.
Options Basics
In, At and Out of the Money
Drag the stock price and watch a call and a put with the same strike flip between in the money and out of the money.
Options Basics
Reading an Option Chain
That big T-shaped table in your trading app: strikes in the middle, calls on the left, puts on the right, each cell with a bid and an ask. Learn to pick out the contract you want.
Options Basics
Put Options
Buying a put: the right to sell at the strike, like "insurance against a fall". The lower the stock goes, the more it's worth.
Options Basics
The Option Seller
The seller of an option gets paid up front but takes on an obligation. Compare the risks of a short call and a short put.
Options: Next Steps
Exercise, Assignment and Expiration Day
What actually happens on expiration day? In-the-money options are auto-exercised, sellers get randomly assigned, and your shares and cash change hands. Plus, why exercising early usually doesn't pay.
Options: Next Steps
The Four Basic Positions
Compare long call, short call, long put and short put side by side, and tweak the payoff curves in real time.
Options: Next Steps
LEAPS Call vs. Short-Dated Call
For the same rise in the stock, why do a 30-day option and a 730-day LEAPS behave so differently?

Related terms

See how “intrinsic value” works for yourself with an animation you can drag and play.

Go to “Call Options”