Does the Intrinsic Value of an American Option Change over Time? ▴ Learn

Does the Intrinsic Value of an American Option Change over Time?

Yes, the intrinsic value of an American option changes over time as the price of the underlying asset fluctuates. Since intrinsic value is the difference between the underlying price and the strike price (or vice versa), any change in the underlying asset's price will immediately change the option's intrinsic value.

Time itself does not change intrinsic value, but it allows for underlying price movement.

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