Intrinsic value: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson m (Spacing 22/8/13) |
imported>Doug Williamson m (Link with In the money page.) |
||
| Line 22: | Line 22: | ||
* [[Present value]] | * [[Present value]] | ||
* [[Time value]] | * [[Time value]] | ||
* [[In the money]] | |||
Revision as of 06:52, 19 June 2014
1.
The component of a the value of an option which relates to the gain - if any - which could be earned by immediate exercise of the option.
For a call option this is the excess - if any - of the underlying asset price over the strike price.
For a put option it is the excess - if any - of the strike price over the underlying asset price.
2.
The value of any financial asset determined by reference to the present value of its expected net future cash flows.
3.
More generally, the value of any asset determined by reference to its particular fundamental characteristics, rather than by reference to current market prices.
