1. The actual value of a security, as opposed to its market price or book value. The intrinsic value includes other variables such as brand name, trademarks, and copyrights that are often dificult to calculate and sometimes not accurately reflected in the market price. One way to look at it is that the market capitalization is the price (i.e. what investors are willing to pay for the company) and intrinsic value is the value (i.e. what the company is really worth). Different investors use different techniques to calculate intrinsic value.
2. The amount by which a call option is in the money, calculated by taking the difference between the strike price and the market price of the underlier. For example, if a call option for 100 shares has a strike price of $35 and the stock is trading at $50 a share than the call option has an intrinsic value of $15 share, or $1500. If the stock price is less than the strike price the call option has no intrinsic value.
3. The amount by which a put option is in the money, calculated by taking the difference between the strike price and the market price of the underlier. For example, if a put option for 100 shares has a strike price of $35 and the stock is trading at $20 a share than the put option has an intrinsic value of $15 per share, or $1500. If the stock price is greater than the strike price the put option has no intrinsic value.
Related information about intrinsic value:
- Intrinsic value (finance) - Wikipedia, the free encyclopedia
In finance, intrinsic value refers to the value of a security which is intrinsic to or contained in the security itself. It is also frequently called fundamental value.
- Intrinsic value (ethics) - Wikipedia, the free encyclopedia
Intrinsic value is an ethical and philosophic property. It is the ethical or philosophic value that an object has "in itself" or "for its own sake", as an intrinsic property.
- Intrinsic Value Definition | Investopedia
1. The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible ...
- Intrinsic vs. Extrinsic Value (Stanford Encyclopedia of Philosophy)
Oct 22, 2002 ... Intrinsic value has traditionally been thought to lie at the heart of ethics. Philosophers use a number of terms to refer to such value. The intrinsic ...
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Definition of intrinsic value: The actual value of a security, as opposed to its market price or book value. The intrinsic value includes other variables such as ...
- Intrinsic value - Wiki | The Motley Fool
Over the years, there have been many definitions of intrinsic value. John Burr Williams, author of The Theory of Investment Value, defined it as the present value ...
- Intrinsic Value - Financial Dictionary - The Free Dictionary
The value of an option if it were to expire immediately with the underlying stock at its current price; the amount by which an option is in-the-money. For call ...
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Learn how to invest like billionaire Warren Buffett by calculating the intrinsic value of a company with the BuffettsBooks calculator.