Home Portfolio Management Alternative Investments Trading Strategies RSS Feed

Intrinsic value

In the Money, At the Money, Out of the Money

Moneyness of an option Moneyness is a strange sounding term, but it is sometimes used for describing the amount of intrinsic value an option has. All options belong to one of the three basic groups (and they can move between these groups as the market price of the underlying changes, as you will see below). … Read more


Option Intrinsic Value Formulas

Strike price and intrinsic value On the examples with Microsoft stock, we have explored the strike price and intrinsic value of call options and put options. To sum up and make it look a bit more scientific, let’s look at the formulas for calculating intrinsic value for calls and puts. Calculating intrinsic value of call … Read more


Strike Price and Intrinsic Value of Put Options

Intrinsic value In the article about strike price and intrinsic value of call options we learned that intrinsic value is the difference between the market price of the underlying stock and the option’s strike price. It moves together with the stock price, but can’t be negative. However, we only talked about calls. Put options are … Read more


Strike Price and Intrinsic Value of Call Options

Option’s strike price Options represent a right, but not an obligation. There are two types of options, calls and puts. Call gives you the right to buy a stock, while put gives you the right to sell a stock. One question may come to your mind now. At what price can I buy or sell … Read more



Newer articles »