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I don't think it's accurate to say that it has no intrinsic value by definition. If you do a fundamental analysis on the options without reference to their mark
by lacker 8y ago
I don't think it's accurate to say that it has no intrinsic value by definition. If you do a fundamental analysis on the options without reference to their market value, the Black Scholes formula will tell you that an option, even an option out of the money, is worth something. That is the definition of intrinsic value.
Options out of the money also clearly have a market value, for public companies at least.
- mrfredward 8y agoIntrinsic value has a very specific meaning in the options world (different from the everyday meaning you are referring to): https://www.investopedia.com/terms/i/intrinsicvalue.asp https://www.investopedia.com/terms/i/intrinsicvalue.asp
- lacker 8y agoAccording to the first sentence in the article you link, "Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, using fundamental analysis." That's precisely what I am talking about.
- mrfredward 8y agoRead more than the first sentence before you double down.
- deleted 8y ago[deleted]