How to Calculate Intrinsic vs Extrinsic Value? The Easy Way

Calculating intrinsic and extrinsic value is very easy. Please follow these statements.
Intrinsic value = Stock price now – the strike price.
Example Twitter stock price $28.01 – the strike price at $25 = intrinsic value of $3.01.
Extrinsic value = call option Contract price – intrinsic value
Example Twitter Call option contract price $3.35 – intrinsic value $3.01 = Extrinsic value at $0.34
The most important things in an option contract is to know the contract price, the strike and the expiration date.
In addition, you can calculate the intrinsic and extrinsic value, just to know how much you are paying.
To make money in options, you should have the same direction for your stock.
To get more information, check training level 14 How to trade call and put options.
Get your first training for free.
If you have questions, just write back directly to
Free chart training
Free chart
Subscribe to my Youtube channel to get more tips on trading stocks

Spread the love

Leave a Reply

Your email address will not be published. Required fields are marked *