Consider a hypothetical example in which the price of the underlying asset is 10,000 yen. A call with a strike price of 9,500 yen has an intrinsic value of 10,000 − 9,500 = 500 yen. A put with the same strike price has an intrinsic value of zero, because 9,500 − 10,000 is negative. The part of the premium above the intrinsic value is called the time value.
Intrinsic value
- Japanese
- 本質的価値
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
Intrinsic value is what an option would be worth if it were exercised now. For a call option (call), it is the price of the underlying asset minus the strike price; for a put option (put), it is the strike price minus the price of the underlying asset. If the result is negative, the intrinsic value is zero.