What is intrinsic value of the option? How to calculate intrinsic value of an option?

Intrinsic value meaning: The intrinsic value of an option is the amount by which the strike price of an option is in the money. It is also considered to be the value of an option if it were exercised today. The intrinsic value is the difference between the strike price of the option and the current market price of the underlying asset.

For the call option

Intrinsic value = current price of the underlying - strike price

For the put option

Intrinsic value = strike price - current price of the underlying asset

For example, if you hold a Reliance call option at 900 and the current price of the stock is 920, the intrinsic value of your option is 920-900= Rs 20

Please note that the intrinsic value of an underlying can be either positive or zero. It cannot be negative.