In options trading, intrinsic value is the difference between the price of the underlying asset and the strike price of the option. The method used to calculate intrinsic value varies depending on the type of option purchased - in call options, it is the underlying asset price minus the strike price, whereas in put options, it is the strike price minus the underlying asset price.

Intrinsic value only applies to options that are in the money; a negative intrinsic value indicates that the option is either in the money or out of the money.

There is also the 'extrinsic value' of the option to consider in options trading. The difference between an option's market price and intrinsic value is used to calculate extrinsic value. So, if an option has a $50 premium and a $30 intrinsic value, its extrinsic value is $20.

In options trading, intrinsic value represents the real, tangible worth of an option based on the difference between the underlying asset's market price and the option's strike price. It applies only to in-the-money (ITM) options.
Examples:
1. Call Option (ITM): A call option has intrinsic value if the stock's market price exceeds the strike price.
Example: A call option with a strike price of $50 when the stock is trading at $60 has an intrinsic value of $10.

2. Put Option (ITM): A put option has intrinsic value if the stock’s market price is below the strike price.
- Example: A put option with a strike price of $70 when the stock is trading at $65 has an intrinsic value of $5.

Options out-of-the-money (OTM) have zero intrinsic value.