Intrinsic value in options refers to the difference between the underlying asset’s current price and the opportunity’s strike price. It is the built-in, “real” value an alternative would have if exercised immediately.

For a call option, the intrinsic value is the underlying asset’s current price minus the strike price. It’s considered inherent value if the underlying asset’s price exceeds the strike price.

For a put option, the intrinsic value is the strike price minus the current fee of the underlying asset. It has intrinsic value if the underlying asset’s price is below the strike price.

If the calculation results in a negative number, the intrinsic value is considered zero; options do not have a negative intrinsic value. Intrinsic value is one part of an option’s total value, along with time value.