time value

Time Value

The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract.

Notes:

Basically, time value is the value the option has in addition to its intrinsic value.

See also: Call, Derivative, Expiration Date, Intrinsic Value, Leverage, Max Pain, Option, Put, Strike Price

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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.

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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.