Intrinsic Value is the portion of the option's price attributed to the contract already being in the money. It can be calculated by deducting the strike price of the option from its prevailing underlying stock price in call options and by deducting the underlying price from the strike price in the case of a put option.
Options pricing consists of two components: extrinsic value, and intrinsic value. Intrinsic value is defined by how much the option is in-the-money against the underlying (stock) at its current price. The extrinsic value is the remaining value of the option, once intrinsic value is subtracted.