What is the 'Intrinsic Value'
The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.
2. For call options, this is the difference between the underlying stock's price and the strike price. For put options, it is the difference between the strike price and the underlying stock's price. In the case of both puts and calls, if the respective difference value is negative, the intrinsic value is given as zero.
BREAKING DOWN 'Intrinsic Value'
1. For example, value investors that follow fundamental analysis look at both qualitative (business model, governance, target market factors etc.) and quantitative (ratios, financial statement analysis, etc.) aspects of a business to see if the business is currently out of favor with the market and is really worth much more than its current valuation.
2. Intrinsic value in options is the inthemoney portion of the option's premium. For example, If a call options strike price is $15 and the underlying stock's market price is at $25, then the intrinsic value of the call option is $10. An option is usually never worth less than what an option holder can receive if the option is exercised.

Time Value
The portion of an option's premium that is attributable to the ... 
LargeValue Stock
A type of largecap stock investment where the intrinsic value ... 
Extrinsic Value
The difference between an option's market price and its intrinsic ... 
Value Investing
The strategy of selecting stocks that trade for less than their ... 
At The Money
A situation where an option's strike price is identical to the ... 
Out Of The Money  OTM
A call option with a strike price that is higher than the market ...

Investing
What Is The Intrinsic Value Of A Stock?
Intrinsic value can be subjective and difficult to estimate. Itâ€™s a perception of a securityâ€™s value that factors tangible and intangible factors. 
Investing
What Is Option Moneyness?
Get the basics under your cap before you get into the game. 
Investing
What Is The Intrinsic Value Of A Stock?
Intrinsic value reduces the subjective perception of a stock's value by analyzing its fundamentals. 
Investing
Intrinsic Value
Learn more about this way of valuing a company or an asset based on an underlying perception of its true value. 
Trading
What Drives An Option's Price?
The primary drivers of an optionâ€™s price are the underlying stockâ€™s current price, the optionâ€™s intrinsic value, its time to expiration and volatility. 
Markets
Getting A Handle On The Options Premium
The price of an option, otherwise known as the premium, has two basic components: the intrinsic value and the time value. Understanding these factors better can help the trader discern which ... 
Investing
What Does It Mean When an Option is At The Money?
The strike price of an atthemoney options contract is equal to its current market price. Options that are at the money have no intrinsic value, but may have time value. 
Trading
The Options Premium
An options premium is the amount of money that investors pay for a call or put option. The two components that affect options pricing are the intrinsic value and time value. Matthew is interested ... 
Investing
The Basics Of Option Price
Options can be an excellent addition to a portfolio. Find out how to get started. 
Trading
How To Avoid Closing Options Below Intrinsic Value
To get the best return possible on your options trading, it is important to understand how options work and the markets in which they trade.

What role does intrinsic value play in put options?
See why the concept of intrinsic value is so important in options trading and how investors use it to evaluate the worth ... Read Answer >> 
What role does intrinsic value play in call options?
Understand why the concept of intrinsic value is important for options traders and how they can use it to estimate what a ... Read Answer >> 
Do you always have to consider intrinsic value when purchasing a stock? Why or why ...
Take a deeper look at why value investors consider a stock's intrinsic value an important consideration before picking a ... Read Answer >> 
What is the difference between intrinsic value and current market value?
Discover the differences between intrinsic and market values, what makes the former difficult to determine and how investor ... Read Answer >> 
What happens when a security reaches its strike price?
Learn more about the moneyness of stock options and what happens when the underlying security's price reaches the option ... Read Answer >> 
When is a call option considered to be "in the money"?
Learn about call options, their intrinsic values and why a call option is in the money when the underlying stock price is ... Read Answer >>