How Is the "Intrinsic Value" of a Put Option Calculated? ▴ Learn

How Is the “Intrinsic Value” of a Put Option Calculated?

The intrinsic value of a put option is the immediate profit that could be realized if the option were exercised right now. It is calculated as the Strike Price minus the current market price (Spot Price) of the underlying asset.

If the result is positive, that is the intrinsic value. If the result is zero or negative (meaning the spot price is above the strike price), the intrinsic value is zero, as the option is "out-of-the-money."

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