Time value
The portion of an option's premium above intrinsic value, reflecting remaining time and expected movement.
Where it is explained in full
Covered calls: the whole position, not just the premium. Selling a call against stock you own puts money in your pocket today and gives something up tomorrow. Look at both halves, or the premium will look like free money when it is not.
Options from the beginning: calls, puts, and the Greeks in plain words. What a contract actually is, what the numbers on the screen mean, and why an option's value before expiration is not the same as its payoff at expiration.
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Words beside it
- Enterprise value
What it would cost to buy a whole company: market value plus debt minus cash.
- face value
The amount of money the borrower promises to return to you at the end of a bond agreement. If you bought a bond for one thousand dollars and that is what they pay back at the end, one thousand dollars is the face value.
- Intrinsic value (options)
The amount an option is in the money: for a call, stock price minus strike, if positive.
- Lifetime value (LTV)
What a customer pays over the time they stay, minus what they cost to serve.
- Net asset value
A fund's total holdings minus liabilities, divided by shares outstanding. Computed daily for mutual funds.
- Par value
A bond's face value.
Ask about Time value
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