Derivatives Option Value and Intrinsic Value Financial Essay
Intrinsic value: call option with 0.46, 55.46 - 55 By assuming that the NA share price remains at 56. The dividend is paid, we can see in the previous table that the intrinsic value, in the case of put options trading below the intrinsic value, you just have to buy the shares and then exercise the puts. You would pay 70. Buy the stock and receive the put exercise. In such cases, the European put option has a negative time value. My question is: do European shares in practice sell below intrinsic value? Or is the theoretical lower limit only theoretical. Note: I have no practical experience trading derivatives. My knowledge of derivatives is completely theoretical, hence this question. Validity: a description of a derivative that relates its exercise price to the price of its underlying asset. Moneyness describes the intrinsic value of an option in its current state.