Intrinsic and extrinsic value for options trading

For options trading, e get important make you sabi wetin be intrinsic and extrinsic value. Intrinsic value na di amount wey strike price dey below (for call options) or above (for put options) current market price. Extrinsic value, on the other hand, na di additional value wey dey above di intrinsic value and e come from factors like time to expiration and volatility. Traders fit use this knowledge to buy undervalued options, sell overvalued options, and protect their profits. By recognizing and leveraging intrinsic and extrinsic values, traders fit improve their options trading strategies.