Intrinsic Value
Intrinsic Value is the in-the-money portion of an option's price — what it would be worth if exercised right now.
Call IV = max(0, Spot − Strike); Put IV = max(0, Strike − Spot)What Intrinsic Value Means
Intrinsic Value is the part of an option's premium that comes from it being in-the-money — the immediate, exercise-now value. For a call it is spot minus strike (floored at zero); for a put it is strike minus spot (floored at zero). An out-of-the-money option has zero intrinsic value; only in-the-money options carry any.
For example, with Nifty at 24,500, a 24,300 call has 200 points of intrinsic value, while a 24,700 call has none — it is entirely time value until spot crosses 24,700.
Intrinsic Value vs Time Value
Every option premium splits into two parts: intrinsic value plus time value. Intrinsic value is hard, exercise-based worth; time value is the extra paid for the possibility of further favourable movement before expiry. As expiry nears, time value decays to zero (Theta), leaving only intrinsic value at settlement.
Intrinsic Value in the Indian Market
Because Nifty and BankNifty options are cash-settled on NSE, at expiry an in-the-money option pays exactly its intrinsic value in cash — there is no share delivery. So an option's closing value on Thursday is purely its intrinsic value. Quintal Mind shows live spot versus strike so the intrinsic component of any premium is easy to read.
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