time value

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Time value

Applies to derivative products. Portion of an option price that is in excess of the intrinsic value, due to the amount of volatility in the stock; sometime referred to as premium. Time value is positively related to the length of time remaining until expiration.

Time Value

1. See: Option time value.

2. See: Time value of money.

3. See: Extrinsic value.

time value

The portion of an option premium in excess of the option's intrinsic value. A call option that allows the holder to buy 100 shares of a $25 stock for $20 (the strike price) has an intrinsic value of $500. The time value is $150 if the option trades for $650.
References in periodicals archive ?
M-S make the explicit assumption that opportunity time value rises proportionately with income.
If the pooled model is estimated for boat owners, the estimated opportunity time value increases to $33.
These methodologies, and all travel cost models, are sensitive to variation in monetary travel costs and an error in these costs can create corresponding error in imputed opportunity time value (and, most importantly, in estimated consumer surplus).
The estimated opportunity time value does not appear to vary proportionately and positively with average income as is commonly assumed in travel cost models where opportunity time cost is based on income.
The pooled model severs the connection between opportunity time value estimates and income for those who are unlikely to substitute time and income.