Does an Out-of-the-Money (OTM) Option Have Intrinsic Value?
No, an Out-of-the-Money (OTM) option, by definition, has zero intrinsic value. Intrinsic value represents the immediate profit upon exercise.
If an option is OTM, exercising it immediately would result in a loss or break-even, so its intrinsic value is zero. Its premium consists entirely of time value.
