intrinsic value

intrinsic value definition - finance
The value of an option that is in-the-money, or that still has value. If a call option can be used to buy a stock at a strike price (the price at which the option allows the stock to be bought) of $50, and the market price is $55, then the intrinsic value is $5.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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