Intrinsic & Extrinsic Value Explained (What Robinhood Doesn't Tell You)
Channel: Justeen15
Date: 2022-03-06

If you are an option buyer, there are better option contracts to buy based on a set of factors. Intrinsic & extrinsic values are some of them, because the sum of those 2 values are exactly the price you're paying for an option contract. Robinhood, sadly, does not tell you anything about intrinsic and extrinsic value, which I think they are important enough that I could cover it. 

Therefore, in this video, I use design to explain the true definition of intrinsic & extrinsic values, their importance, and explore some common patterns to give you insights on which options contracts may be a better buy for you (or a better sell if you decide to sell some calls and puts).

This video is very intertwined with my In the money vs Out of the money option video because they share a lot in common, but fundamentally different concepts, and yet affect each other. Link here https://youtu.be/GUpJ-EjHKm4 and don't miss a chance to learn more! :)

Related links & videos mentioned:
► Buy call & put simulation: https://www.youtube.com/watch?v=PxmrtznqcNo&list=PLNgWNg4wjoKuxTOnelHdPZ51dyfWoMo7K&index=1
► In the money & out of the money options: https://youtu.be/GUpJ-EjHKm4
► Theta greek: https://youtu.be/XHlv3bpB9s8
► Delta greek: https://youtu.be/nMwU0B-nS4Q

▶︎ 80% Return in 1 year: https://youtu.be/UmT0sOWBwi8
▶︎ 80% Return Q&A: https://youtu.be/6OEzAhBRj8c

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0:00 Intro
1:43 High level view of intrinsic and extrinsic value
3:20 Intrinsic value for ITM (in the money) and OTM (out of the money) options
5:01 Extrinsic value for ITM options
8:44 Extrinsic value for OTM options
11:22 Pattern 1: Intrinsic value & extrinsic value & ITM/OTM
12:00 Pattern 2:  Intrinsic value & extrinsic value & delta greek
12:22 Pattern 3: Intrinsic value & extrinsic value & theta greek
13:39 Pattern 4: Intrinsic value & extrinsic value & option buyers and sellers

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Just a practical guide.
Music: Joakim Karud http://youtube.com/joakimkarud
#IntrinsicExtrinsicValue #OptionTrading #InTheMoneyOutOfTheMoney