Intrinsic vs Extrinsic Value | Options Trading Explained

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Every option premium is made up of two components, intrinsic value (what the option is worth right now) and extrinsic value (what you’re paying for time and volatility). A former NYSE options market maker breaks down exactly how to calculate both and why it matters for every trade you take.

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Disclaimer:
This content is for educational purposes only.
Not financial advice. Always do your own research.