Value of Options Glossary

Below are options glossary of terms related to the value of an option. See also the general glossary of options strategy.

In the Money (best)

In the money call option

When the strike price or exercise price of a call option is below the current price, the call option is considered 'in the money'.

In the money put option

Alternatively, When the strike price or exercise price of a put option is above the current price, the put option is considered 'in the money'.

At the Money

When the strike price and the current price are the same, the option (put or call) is considered 'at the money'.

Out of the Money

Out of the money call option

When the strike price of the call option is above the market price, the call option is out of the money.

Out of the money put option

When the strike price of the put option is below the market price, the put option is out of the money.

Intrinsic value of an option

The intrinsic value of an option is the value of the option if exercised on the spot. The intrinsic value of an option is the amount by which the option is in the money.

Time Value of an option

The time value of an option is the difference between the option's actual value and the intrinsic value of the option. The time value of an option is also known as the option value.