What Is Intrinsic Value?

Intrinsic value is one way to measure the value of an option contract. Here, we take a closer look at the metric and explain how it is used in options trading.

person looking at financial graphs on laptop with digital rendition of graph coming out of keyboard
(Image credit: Getty Images)

In the world of investing, options trading can often appear as a complex puzzle. One of the puzzle pieces that frequently demands attention is the concept of "intrinsic value" in options. 

This article is designed to provide you with a clear, concise understanding of intrinsic value in options, including what it is and how it is used.

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Jared Hoffmann
Contributing Writer, Kiplinger.com

Jared Hoffmann is a highly respected financial content creator and options expert, holding a journalism degree from San Francisco State University. Formerly a Senior Options and Day Trading Editor and on-air personality at Money Morning, he excels in delivering comprehensive options education, technical analysis, and risk management education to traders.