Intrinsic Value vs Premium

The immediate exercise value of an options contract if exercised today; for a call option: max(0, spot price − strike price); for a put option: max(0, strike price − spot price); an option with intrinsic value is in-the-money.

The upfront price paid by the option buyer to the option seller for the rights conveyed by the contract; the premium is the buyer's maximum possible loss if the option expires worthless; composed of intrinsic value and extrinsic (time) value.