Part 2 Support and Resistance

Option Premium Breakdown – Intrinsic vs Extrinsic
1. Intrinsic Value

Actual value if exercised TODAY.

For Call: Spot – Strike (if positive)
For Put: Strike – Spot (if positive)

2. Extrinsic (Time + Volatility)

Value due to time left + expectations.

This is where traders either make or lose money.