Intrinsic Value is the actual value of an asset, which may be different than the market value of the asset. With regard to Options pricing, this is the difference between an underlying stocks price and the strike price.
Example: You are looking at the KFT 30 Puts. The cost of the Puts is 1.85. The stock is currently trading at 29. This means there is 1.00 (30-29) in Intrinsic Value Priced into that Put. The other 0.85 is extrinsic value, which is comprised of time & volatility premium.
Intrinsic Value is referred to in Options Trading. You are not likely to hear this term within a Stock Trading System, Day Trading System, or Futures Trading System.
Related terms: Implied Volatility, VIX, Call, Put, Closing Tick, Extrinsic Value