In the context of options trading, the difference between an option premium and the intrinsic value of an option (the amount by which the option is in the money). Time value is affected by implied market volatility as well as the time remaining before the option expires.
see also Intrinsic Value; Premium) For a derivative contract with a non-linear value structure, time value is the difference between the intrinsic value and the premium. Value at Risk or VaR ( see also RiskMetrics) The caculated value of the maximum expected loss for a given portfolio over a defined time horizon (typically one day) and for a pre-set statistical confidence interval, under normal market conditions
The amount by which an Option premium exceeds the Options intrinsic value. Also called "Extrinsic Value".
Any amount by which an option premium exceeds the option's intrinsic value. If an option has no intrinsic value, its premium is made up entirely of time value. (See also extrinsic value)
A value that specifies a number of time units in a time coordinate system. A time value may contain information about a point in time or about a duration.
The balance of an option premium not represented by the option's intrinsic value.
The time value of an option is the value over and above intrinsic value that the market places on the options. It can be considered as the value of the continuing exposure to the movement in the underlying product price that the option provides. The price that the market puts on this time value depends on a number of factors: time to expiry, volatility of the underlying product price, risk free interest rates and expected dividends.
The amount of money option buyer are willing to pay for an option in the anticipation that, over time, a change in the underlying futures price will cause the option to increase in value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered time value. Also referred to as extrinsic value.
The part of the price of an option that is due to the time remaining between the current date & the expiration date of the option. See also Intrinsic Value & Time Decay.
Applies to derivative products. Portion of an option price that is in excess of the intrinsic value, due to the amount of volatility in the stock; sometime referred to as premium.
The amount that the current market price of a right, warrant or option exceeds its intrinsic value.
The value of an option above its intrinsic value.
That portion of an option’s premium that represents the amount in excess of the intrinsic value.
The amount investors are willing to pay for the possibility that they could make a profit from their option position. It is influenced by time to expiry, dividends, interest rates, volatility and market expectations.
It is determined by the remaining lifespan of the option, the volatility and the cost of refinancing the underlying asset (interest rates). Time value = option price - intrinsic value
The difference between the option premium and the option's intrinsic value.
The dollar amount by which the premium of an option exceeds the intrinsic value of an option.
Has two general meanings. The first is the value or amount of a sum of money adjusted by an interest rate for a given time period. The second common usage is in the context of options. Here, it defines the amount of premium attributed to the remaining term of the option after factoring out any in-the-money component. Is multiplicative factor which is dependent on the time remaining to expiration and the attendant volatility. However, time value is not proportional but tends to more nearly approximate a square root function.
Option value associated with the time left to maturity since during the life an option can move in and out of the money.
The difference between the premium paid for an option and the intrinsic value. As an option approaches expiration, the time value erodes, eventually to zero.
Refers to that value of an option premium that is separate from and, for the case of an in-the-money option, in addition to, intrinsic value. Time value includes volatility, time until expiration, and other factors that are extrinsic in the sense that they are distinct from the intrinsic value in the option premium.
Portion of an option price that is in excess of the intrinsic value, due to the amount of volatility in the stock; sometime referred to as premium. Time value is positively related to the length of time remaining until expiration
part of the option premium that reflects the excess over the optionâ€(tm)s intrinsic value, or the entire premium, if there is no intrinsic value. At given price levels, the optionâ€(tm)s time value will decline until expiration.
Time value is the intrinsic value subtracted from the market price. Time value represents the remaining value that has been attributed to the warrant by the market, and the fact that the market might move before the expiry date.
The difference between the total cost of an option premium and its intrinsic value. Out-of-the-money options consist solely of time value.
The amount by which the current market price of a option exceeds its intrinsic value.
The premium of an out-of-the money option reflecting the probability that an option will move into-the-money before expiration constitutes the time value of the option. There also may be some time value in the premium of an in-the-money option, which reflects the probability of the option moving further into the money. To determine the time value of an in-the-money option, subtract the amount by which the option is in-the-money (intrinsic value) from the total premium.
A phrase used in relation to options. Time value is any portion of the option premium over an above the intrinsic value.
The market value of an option minus its intrinsic value; that is, the difference between the option premium and the amount, if any, that the option is in-the-money. Related: In-the-Money
The market price of an option, less its intrinsic value, the proportion of the value of an option that relates to the time remaining in the life of the option.
The amount, if any, by which an option's premium exceeds its intrinsic value. If an option is not in-the-money, its premium consists entirely of time value.
The amount by which an option's premium exceeds its intrinsic value. It reflects the fact that the longer the time until the expiration of the option, the greater the probability of the option attaining intrinsic value. If an option has no intrinsic value, its premium is entirely time value.
In options, the value of the premium is based on the amount of time left before the contract expires and the volatility of the underlying contract. Time value represents that portion of the premium in excess of intrinsic value. Time value diminishes as the expiration of the option draws near and/or if the underlying contract's price development becomes less volatile
The total option premium less the option's intrinsic value.
The amount of premium which exceeds the intrinsic value of an option contract.
The portion of a warrant's price that is not accounted for by the intrinsic value.
The part of an option premium that is in excess of the intrinsic value.
The portion of the premium that is based on the amount of time remaining until the expiration date of the option contract, and that the underlying components that determine the value of the option may change during that time. Time value is generally equal to the difference between the premium and the intrinsic value.
The part of an option's total price that exceeds its intrinsic value. The price ...
The additional amount of premium beyond the intrinsic value that traders are willing to pay for an option.
The part of the option premium derived from the volatility and the time remaining until expiration. It is the part of the option premium that is NOT the intrinsic value.
The premium assigned to an option to pay for the time opportunity afforded by the option. The value of an option in excess of its intrinsic value. Time value = option price - intrinsic value
This represents the difference between the option premium and the intrinsic value.
The excess, if any, of an option's premium over its intrinsic value.
The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract. Time value is whatever value the option has in addition to its intrinsic value.
The difference between an option's intrinsic value and the current market price. The hope being that the intrinsic value over time will go above the market value.
That portion of an option's premium that exceeds the intrinsic value. The time value of an option reflects the probability that the option will move into-the-money. Therefore, the longer the time remaining until expiration of the option, the greater its time value. Also called Extrinsic Value.
The amount by which an option's premium exceeds its intrinsic value. Usually relative to the time remaining before the option expires.
A component of the market value of an option.
The amount by which the current normal market value of a right, option or warrant exceeds its underlying value. Essentially, time value is the financing cost of a hedge.