Glossary › time value

Trading glossary · advanced

time value

The extra part of a buy-or-sell ticket's price that comes from the time left before it ends.

The fuller meaning

The part of an option's premium above its intrinsic value, reflecting time to expiry and implied volatility. It shrinks as expiry approaches, fastest in the final weeks, and is zero at expiry; an at-the-money option's premium is all time value.

time value.

Related words

at the money · backtest · backwardation · basis · call option · contango · data snooping · delta · edge · entry trigger