Update

Related Content

'time value' can also refer to...

 

More Like This

Show all results sharing these subjects:

  • Social sciences
  • Economics

GO

Show Summary Details

Overview

time value


Quick Reference

The market value of an option over and above its intrinsic value. The time value represents the value of the possibility that a movement in the price of the underlying will make the option worth exercising, even if it is not currently in the money. This value declines exponatially as the expiry date approaches. At expiry the value of an option, if any, consists solely of its intrinsic value. See also theta.

Subjects: Social sciencesEconomics


Reference entries