Extrinsic value measures the difference between the market price of an option, called the premium, and its intrinsic value. The opposite of extrinsic value is intrinsic value, which is the inherent ...
Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...
In options trading, assessing intrinsic and extrinsic value can help determine an option's price. Intrinsic value shows the profit from immediate exercise, while extrinsic value accounts for factors ...