What Is the Maximum Intrinsic Value an Option Can Theoretically Reach? ⎊ Path

What Is the Maximum Intrinsic Value an Option Can Theoretically Reach?

For a call option, the maximum intrinsic value is theoretically infinite, as the underlying asset's price can rise indefinitely. For a put option, the maximum intrinsic value is limited to the strike price, as the underlying asset's price cannot fall below zero.

These limits define the maximum possible profit for each option type.

What Is the Relationship between Call and Put Options Defined by ‘Put-Call Parity’?

Define the Term “In-the-Money” (ITM) for Both a Call and a Put Option

What Is the Risk-Reward Profile of a Protective Put versus a Covered Call?

What Happens to the Moneyness of a Call and a Put Option If the Underlying Asset’s Price Equals the Strike Price Exactly at Expiration?

What Is a Common Options Strategy That Aims for Maximum Profit through Limited Risk?

How Is a ‘Synthetic Long Call’ Constructed Using the Underlying Asset and a Put Option?

How Does the Profit Profile of a Long Call Option Compare to a Short Put Option?

What Is the Maximum Profit and Maximum Loss for a Protective Put Strategy?

Glossar

Maximum Intrinsic Value

Value ⎊ Maximum Intrinsic Value for an option is achieved when it is exercised at the point where the difference between the underlying price and the strike price is maximized, which essentially occurs when the option is extremely deep in the money.

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.