what is intrinsic value in options trading?

@emma_durban - 2 months ago - Forex Education

Could someone explain what intrinsic value means in option trading, please help me make sense of it.

@cahaya_dewan - 2 months ago

The meaning of intrinsic value is the difference between the strike price of the option, and the current market price of the underlying asset.

So, if your stock call option contract has a $100 strike price but the current market price of the stock is $125 then the intrinsic value of your option contract is $25. If you decide to exercise the call option, you will have to buy the stock at $100 and sell it at $125 so you make a profit of $25 per share.