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Intrinsic Value Definition
Description
Intrinsic value refers to the perceived or calculated value of an asset, investment, or a company. It is determined through fundamental analysis without reference to its market value. It’s often used in options trading to denote the difference between the option’s strike price and the underlying asset’s price.
Formula (for options):
Intrinsic Value of a Call Option = Current Stock Price – Strike Price (if the result is negative, the intrinsic value is 0).
Intrinsic Value of a Put Option = Strike Price – Current Stock Price (if the result is negative, the intrinsic value is 0).

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