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Intrinsic Value and Time

Intrinsic Value and Time

Intrinsic Value for call option is underlying stock price minus strike price.

Intrinsic Value = Underlying Stock Price – strike price

Intrinsic Value for put Option is strike price minus underlying stock price.

Intrinsic Value = strike Price – Underlying stock price

Option Premium is Intrinsic Value plus ( addition) Time Value.

Option Premium = Intrinsic Value + Time Value

Time Value = Premium minus Intrinsic Value

Intrinsic Value and Time Value Table
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