When Is the Time Value of an Option at Its Maximum? ▴ Learn

When Is the Time Value of an Option at Its Maximum?

The time value of an option is typically at its maximum when the option is At-The-Money (ATM) and has a long time remaining until expiration. ATM options have the highest uncertainty about their final value, and a longer duration allows more time for the underlying price to move favorably.

How Does an ATM Put option’S Premium Compare to an ATM Call Option’s Premium?

How Does the Duration of a Backwardation Period Relate to the Strength of the Subsequent Market Recovery?

What Is the Term for an Option That Is Not Exercised by Its Expiration Date?

What Is Meant by an Option Being ‘In-the-Money’ (ITM), ‘At-the-Money’ (ATM), or ‘Out-of-the-Money’ (OTM)?