Skip to main content

Can an Option’s Intrinsic Value Be Negative?

No, an option's intrinsic value cannot be negative. Intrinsic value is defined as the maximum of (Underlying Price – Strike Price) or (Strike Price – Underlying Price) and zero.

If the calculation yields a negative number, the intrinsic value is simply zero.

Does Gamma Always Have a Positive Sign for Both Call and Put Options?
What Is the Difference between a Positive and Negative Rebase?
Can an Option Have a Negative Intrinsic Value?
Distinguish between ‘Positive Slippage’ and ‘Negative Slippage’