What Is the Primary Determinant of an Option’s Extrinsic Value?

The primary determinants of an option's extrinsic (or time) value are the time remaining until expiration and the implied volatility of the underlying asset. The longer the time to expiration, the greater the chance of a favorable price movement, thus increasing extrinsic value.

Higher implied volatility also increases the chance of a large price move, further boosting the extrinsic value.