Intrinsic Value
/ˌɪntrɪnzɪk ˈvæljuː/
Definitions
- (n.) The inherent worth of a security, asset, or right based on its fundamental qualities, distinct from its market price.
The intrinsic value of the stock was higher than its current trading price.
- (n.) In options law, the amount by which an option is in-the-money, i.e., the difference between the underlying asset’s current price and the option’s strike price.
The call option has an intrinsic value of $5 since the stock price exceeds the strike price by that amount.
Forms
- intrinsic value
Related terms
See also
Commentary
Intrinsic value often contrasts with market or extrinsic value; clear context is crucial when drafting to specify which meaning applies, especially in securities and options agreements.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.