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What Is the Intrinsic Value of an OTM Option?

The intrinsic value of an OTM option is zero.
Greeks.Live22.11.25

What Is the Intrinsic Value of an OTM Option?

The intrinsic value of an Out-The-Money (OTM) option is zero. Intrinsic value represents the immediate profit from exercise.

Since an OTM option would not be profitable to exercise, its intrinsic value is defined as zero. The option's entire premium is composed of time value.

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