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  Intrinsic Value of Options
  • Intrinsic value is the higher of zero and the value of the option if the option were exercised immediately.
     
  • At the money: Price of the underlying is the same as the strike price of the option and carries nil payoff.
     
  • In the money: Price of the underlying is greater / smaller than the strike price of a call / put option and exercising it results in a positive pay off.
     
  • Out of the money: Price of the underlying is smaller / greater than the strike price of a call / put option and exercising it results in a nil pay off.


 

               
     
 
   
 

 

 

 

 

 

 

 












 





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