Intrinsic Value
The amount by which an option is in the money; the immediate exercise value.
Explanation
For calls: max(0, underlying price - strike price). For puts: max(0, strike price - underlying price). OTM and ATM options have zero intrinsic value. Intrinsic value represents the minimum value of an ITM option and cannot be negative.
Example
AAPL is at $155. A 150-strike call has an intrinsic value of $5. A 160-strike call has an intrinsic value of $0.