Call Options and Put Options that are in the money have Intrinsic Value. A Call option is in the money when the market is above the strike price. Thus an ABC Call Option with a strike price of 50 and the market price of ABC at 54 would have intrinsic value of 4 points. This is true whether the peron is Long (buyer) or Short (seller).
A Put Option is in the money with Intrinsic value when the market is below the strike price. If an XYZ 70 Put is trading and XYZ Stock is trading at 68, the option has 2 points of intrinsic value.
Intrinsic Value and In the money Options
Options that are out of the money on either calls or puts have 0 Intrinsic Value. There is never negative intrinsic value. An option is either in the money or not.
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