GENERAL KNOWLEDGE

Detailed explanation-1: -If the market price is below the strike price, then the call option has zero intrinsic value.

Detailed explanation-2: -The Intrinsic value for call option will be the underlying stock’s price minus its call strike price, whereas for the put option, it is the put strike price minus the underlying stock price. ATM and OTM options don’t have any Intrinsic value. Time Value: The Time value is also referred to as the Extrinsic value.

Detailed explanation-3: -For an option that is at-the-money or out-of-the-money, the intrinsic value is zero. An option’s intrinsic value cannot be negative, because if the option is not worth anything, the option holder would not exercise it.

Detailed explanation-4: -The intrinsic value for a call option-the right, but not the obligation, to buy an asset-is equal to the underlying price minus the strike price, while the intrinsic value for a put option-the right to sell an asset-is equal to the strike price minus the underlying price.