The intrinsic value is the calculated future value of the stock using some mathematical formula. We used to predict its future earnings and try to discount it with our pre-determined discount rate to find this value. Suppose the market price of a stock is Rs. 200 and the value of its 190 strike price call option is 25. Then the intrinsic value of the call option is 200 - 190 = 10. So actually the option is trading Rs. 15 higher than its intrinsic value.