What is the intrinsic value of a call option?

Intrinsic value for a call = max(0, S − K), where S is the current stock price and K is the strike. If the stock trades above the strike, the option has positive intrinsic value; otherwise it is zero.

What is the intrinsic value of a put option?

Intrinsic value for a put = max(0, K − S). If the stock is below the strike, the put holder could exercise to sell at K and buy in the market at S, capturing K − S per share.

How is time value calculated?

Time value = option market price − intrinsic value. It represents the extra premium buyers pay for the possibility that the option moves further in the money before expiration. Time value decays to zero at expiration.

What does ITM, ATM, and OTM mean?

ITM (in the money) means the option has positive intrinsic value. ATM (at the money) means the stock price is at or very near the strike. OTM (out of the money) means the option has zero intrinsic value and would expire worthless if exercised now.

Can the market price be less than intrinsic value?

In liquid markets, no — that would create a risk-free arbitrage. If you see a market price below intrinsic value, there is likely a data delay or wide bid-ask spread. This tool flags that case.

Does this account for dividends or early exercise?

No. The intrinsic value formula is the same regardless of dividends or exercise style. Time value components that account for dividends and early exercise are modeled by options pricing models like Black-Scholes, not this tool.

Option Intrinsic Value Calculator

Name: Option Intrinsic Value Calculator
Availability: InStock
Author: Nham Vu

Enter the underlying price, strike price, and option market price to instantly see intrinsic value, time value, and whether the option is ITM, ATM, or OTM.

Option Parameters

Option Type

Underlying Price (S)

Current market price of the underlying asset.

Strike Price (K)

Option Market Price (premium)

Per-share price quoted in the options chain.

Enter option parameters on the left to see the breakdown.

Call Option

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Intrinsic Value

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Time Value

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Market Price

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per share quoted

Value Breakdown

Option Type	—
Underlying Price (S)	—
Strike Price (K)	—
Moneyness	—
Formula	—
Intrinsic Value	—
Option Market Price	—
Time Value	—

Premium Composition

Intrinsic Value 0% Time Value 100%

Summary

Enter the underlying price, strike price, and option market price to instantly see intrinsic value, time value, and whether the option is ITM, ATM, or OTM.

How it works

Select Call or Put as the option type.
Enter the current underlying (stock) price.
Enter the option strike price.
Enter the current option market price (premium).
The calculator shows intrinsic value, time value, and ITM/ATM/OTM status immediately.

Use cases

Determine how much of an option premium is real intrinsic value vs. time value before buying.
Check whether a call or put is in the money, at the money, or out of the money.
Quickly calculate time value decay exposure when the underlying price changes.
Compare intrinsic value across different strike prices to choose the right contract.
Verify that an option market price is at least worth its intrinsic value (no arbitrage check).
Understand how much of a premium is at risk from time decay vs. directional movement.

Frequently Asked Questions

Last updated: 2026-07-24 · Reviewed by Nham Vu