Intrinsic and extrinsic value

Intrinsic value comes from being in the money. Extrinsic value is the option price above intrinsic value.

Together, they split an option's price into two parts that add up to the whole price.

For a call, subtract the strike price from the stock price, with a minimum of zero. For a put, subtract the stock price from the strike price, with the same minimum. In the practice below, read the sample price on the chart, then split two calls into intrinsic and extrinsic value.

The stock here is SOFI at $15.42. The numbers are made-up sample data. They are an example and not a recommendation.