Skip to main content
Learn

What Is the Time Value (Extrinsic Value) of an Option?

The premium minus the intrinsic value, representing the potential for the option to become profitable before expiration.
Greeks.Live02.11.25

What Is the Time Value (Extrinsic Value) of an Option?

Time value is the portion of the option premium that exceeds its intrinsic value. It represents the value the market assigns to the potential for the option to become profitable before expiration.

It is primarily driven by time remaining and the underlying asset's volatility.

How Is “Extrinsic Value” Calculated for an Option?
What Is the Concept of “Extrinsic Value” and How Does It Relate to ITM Options?
How Is ‘Time Value’ (Extrinsic Value) Calculated for an Option?
What Is the Difference between an ‘In-the-Money’ and ‘Out-of-the-Money’ Option?

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.