Can an OTM Option Gain Intrinsic Value before Expiration? ⎊ Path

Can an OTM Option Gain Intrinsic Value before Expiration?

Yes, an OTM option can gain intrinsic value before expiration. This happens if the underlying asset's price moves favorably, causing the option to move from Out-The-Money to At-The-Money or In-The-Money.

For a Call, the price must rise above the strike; for a Put, the price must fall below the strike.

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Glossar

Intrinsic Value

Valuation ⎊ This represents the in-the-money amount of an option, calculated as the difference between the spot price and the strike price, if positive, otherwise zero.