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Intrinsic Value

prices are made up of two components:
and intrinsic value. Intrinsic value is the option or option
inherent worth if it were to be
at that moment. For example, if an
is trading for $10, a $9
would have $1 of intrinsic value. This is because if the call were exercised, the owner would receive the stock at a price that is $1 lower than the current market value.

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