INTRINSIC VALUE

1. Actual value of a security or a company based on the essential perception of its real value including all variables in the business, both tangible and intangible. The worth may or may not be different as to the market value at present. Investors use several analytical techniques to compute intrinsic value, hoping to find investments where the real value of the investment surpasses its present market value.
2. In call options, the difference between the underlying stock’s price and the exercise price. In put options, it is the difference between the exercise price and the underlying stock’s price. However, in both puts and calls, intrinsic value is zero if the respective difference value is zero.

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