Intrinsic Value
1. The value of a company or an asset based on an underlying perception of the value.
2. For call options, this is the difference between the underlying stock's price and the strike price. For put options, it is the difference between the strike price and the underlying stock's price. In the case of both puts and calls, if the difference between the underlying stock's price and the strike price is negative, the value is given as zero.
Investopedia Commentary
1. Intrinsic value includes hidden things like the value of a brand name, which is difficult to calculate.
2. Intrinsic value in options is the in-the-money portion of the option's premium.
Related Links
The Hidden Value Of Intangibles
Value By The Book
Alternatives to Closing Below Intrinsic Value
Guide to Stock-Picking Strategies
Options Basics Tutorial
See also: Book Value, Extrinsic Value, Fundamental Analysis, In-the-Money, Market Value, Valuation
intrinsic value