What Is Intrinsic Value? | Options
📈 What is Intrinsic Value in Options?
In this video, we break down one of the most important concepts in options trading: Intrinsic Value.
You'll learn what intrinsic value really means, why it matters, and how it forms one of the two building blocks of every option premium. Using a real Apple (AAPL) options example, I'll show you exactly how to calculate intrinsic value and how professional options traders evaluate option pricing.
In this video you'll learn:
What intrinsic value is
The two components of an option premium
How to calculate intrinsic value
The difference between intrinsic value and time value
Why professional options traders care about intrinsic value
A real AAPL options example using a live options chain
⏱ Chapters
00:00 Introduction
00:20 What Is Intrinsic Value?
00: 32The Definition of Intrinsic Value
01:20 Real AAPL Example
01:50 Calculating Intrinsic Value
02:15 Breaking Down the Option Premium
02:30 Comparing the 290 vs 320 Strike
02:55 Key Characteristics of Intrinsic Value
03:40 Final Thoughts
Whether you're just starting with options or looking to strengthen your understanding of option pricing, this video will help you build a solid foundation.
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Disclaimer: This video is for educational purposes only and not financial advice.