Can an Option Have Extrinsic Value but Zero Intrinsic Value?

Yes, an option can have extrinsic value but zero intrinsic value. This occurs when an option is at-the-money (ATM) or out-of-the-money (OTM).

For an ATM option, the strike price equals the underlying price, so intrinsic value is zero. For an OTM option, the strike price is unfavorable, so intrinsic value is also zero.

In both cases, the entire premium is composed of extrinsic (time and volatility) value.