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What Is the Minimum Value of an Option’s Premium?

The minimum value of an option's premium is zero.
Greeks.Live22.11.25

What Is the Minimum Value of an Option’s Premium?

The minimum value of an option's premium is zero. An option's premium is the sum of its intrinsic value and time value.

Since both intrinsic value and time value cannot be negative, the lowest possible value for the premium is zero, which occurs when an OTM option expires worthless.

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