## How can you Determine the Intrinsic Value of a Put Option?

The difference between the exercise price and the share price is the intrinsic value of a put.

Example: 100 – 90 = 10

If the share price is lower than the exercise price the put option is "in-the-money". There is a positive intrinsic value.

Share price = Exercise price → "at-the-money"

If share price and exercise price are identical, the intrinsic value is zero. The option is "at-the-money". A negative intrinsic value is derived mathematically if the share price is higher than the exercise price. As the holder will not exercise the option in this case, the intrinsic value is zero. The option is thus "out-of-the-money".

Share price = Exercise price → out-of-the-money“

### Intrinsic value put

 Share price > Exercise price100 > 90 out-of-the-moneyIntrinsic value: 0 Share price = Exercise price100 = 100 at-the-moneyIntrinsic value: 0 Share price < Exercise price80 < 100 in-the-moneyIntrinsic value: 20

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