Difference Between Intrinsic Value And Extrinsic Value?

Confused between what is Intrinsic Value And Extrinsic Value? This Shorts video will explain about both of them. It starts by explaining that intrinsic value is the real value of an option, determined by the gap between the option's strike price and the current market price of the underlying asset. On the other hand, extrinsic value is the extra value added to an option, considering factors like time remaining, market volatility, and investor sentiment. Lastly, the video states that knowing how intrinsic and extrinsic values interact is important for assessing option prices and making smart trading choices.

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