Intrinsic Value: Calls, Puts & Moneyness
Intrinsic value is what an option would be worth if exercised right now. It cannot be negative, and it differs from the quoted market price, which usually includes extrinsic value.
Educational content. Last reviewed October 3, 2026. Not investment advice.
Formulas
Calls have intrinsic value when the stock is above the strike. Puts when the stock is below.
Call intrinsic value = max(0, stock price - strike) Put intrinsic value = max(0, strike - stock price) Contract intrinsic cash = intrinsic value x 100
Moneyness
In the money options have intrinsic value. At the money options are near the strike. Out of the money options have only extrinsic value.
| Stock price | $100 call intrinsic/share | $100 put intrinsic/share |
|---|---|---|
| $90 | $0 (out of the money) | $10 (in the money) |
| $100 | $0 (at the money) | $0 (at the money) |
| $112 | $12 (in the money) | $0 (out of the money) |
Worked example
The stock is $112, a $100 call trades at $13.20.
Intrinsic = $112 - $100 = $12.00 Extrinsic = $13.20 - $12.00 = $1.20 Contract cash value if exercised = $1,200
Expiration payoffs
At expiration, an option is worth its intrinsic value, so payoff diagrams are built from it plus the premium paid or received.
Distinguish exercise value from trading profit
A $100 call has $12 of intrinsic value when the stock is $112. If the call was purchased for $13.20, its expiration result at that stock price is a $120 loss per standard contract before costs: $1,200 of value minus the $1,320 entry premium. Positive intrinsic value alone does not establish a profitable trade.
The corresponding expiration breakeven is $113.20 before fees. Before expiration, remaining time value may allow the call to trade profitably at a different underlying price. Keep expiration payoff and current market value separate when interpreting a calculator or signal.
Use intrinsic value across a spread
For a long $100 call and short $105 call, a $110 stock price gives intrinsic values of $10 and $5. The position's net expiration value is $5 per share, or $500 per standard structure. Subtract the entry debit and costs to calculate profit; the $500 is not all gain.
At a stock price below $100, both calls have zero intrinsic value and the buyer loses the debit. Between the strikes, the long call has value while the short does not. These piecewise relationships create the straight segments in an accurate expiration payoff diagram.
Risks
- Intrinsic value alone ignores premium paid.
- Exercise can discard extrinsic value.
- A dividend can change a call's early-exercise value.
Research tools that use this concept
- LEAPS Options Screener & Long-Call ResearchResearch long-dated calls using delta, intrinsic value, extrinsic value and capital exposure. Understand leverage, time decay and the risk of losing the debit.
- Bull Call Debit Spread ScreenerFind bull call debit spreads and compare entry debit, breakeven and capped expiration profit. Review both option legs and execution costs.
Related guides
- Extrinsic Value: Time Value in OptionsCalculate an option's extrinsic value and understand time decay, volatility and why exercising a long-dated call can forfeit remaining time value.
- Options Premium: Quotes, Spreads & ExecutionLearn how option premium is quoted per share, how contract size changes cash amounts, and why bid, ask, midpoint and fill prices are different.
- LEAPS Calls: Intrinsic Value, Leverage & RiskUnderstand long-dated call options, delta, intrinsic and extrinsic value. Compare capital exposure and the risk of losing the entire option premium.
- Options Academy: Strategies, Metrics & RiskLearn options strategies, Greeks, volatility, premium and assignment. Work through labeled examples and connect the concepts to TradingSignalAI's research tools.
Research the trade before you place it
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