What Is the Difference between an Option’s Intrinsic Value and Its Time Value at Expiration?
At expiration, an option's time value is zero, as there is no remaining time for the underlying price to move favorably. The option's value is purely its intrinsic value, which is the immediate profit realized if the option is exercised.
For a call option, this is the greater of (Spot Price – Strike Price) or zero.
Glossar
Intrinsic Value
Valuation ⎊ This represents the in-the-money amount of an option, calculated as the difference between the spot price and the strike price, if positive, otherwise zero.
Time Value of an Option
Extrinsic ⎊ This represents the portion of the option's premium that is not derived from immediate intrinsic value, instead reflecting the potential for future favorable price movement.
Time Value
Duration ⎊ The temporal dimension inherent in cryptocurrency derivatives, options trading, and financial instruments fundamentally defines time value.