Intrinsic value for call options
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robbie
Apprentice
Joined: 08 Nov 2004
Posts: 7
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 Posted: 07/14/08 - 05:58 Post subject: |
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| I have recently been looking to start with investments. I have accumulated fair amount of assets and I have looking into the most efficient way to invest in a market. I would like to know one thing. How to define ntrinsic value for call options? Any info will do. It will really mean a lot to me. |
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bertie
Apprentice
Joined: 16 May 2004
Posts: 7
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| Posted: 08/13/08 - 03:21 Post subject: |
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The most notable options are American and European-style options. In any case exercise price of the options you have is related to the price that is currently actual, which is the one formed when exercise price is added to the intrinsic value. While the latter signifies the potential earning, the exercise price is, simply put, a price at which an option has to be sold or bought. That said, intrinsic value is a great sign of how your options are doing. If the intrinsic value goes negative, you will look at out-of the-money option and for calls the exercise value will be higher than the underlying one, while for puts it will be lower. Hope you find the info helpful.
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