Financial Definition of Time Value Of An Option
Meaning of Time Value Of An Option
The portion of an option’s 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. Related: in-the-money.
International Trade Meaning and Definition of Time Value Of An Option
The difference between the value of an option and the option’s intrinsic value.
Related Entries of Time Value Of An Option in the Encyclopedia of Law Project
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Time Value Of An Option in Historical Law
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Legal Abbreviations and Acronyms
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What is Time Value Of An Option?
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Concept of Time Value of an Option in the context of Real Property
A short definition of Time Value of an Option: The value of an option based on the expiration date. Example: An option to purchase property would be worth less if it expires in one week than it would be if it expires in one year, even though the price and terms are the same. The reasoning is that the value of the property has a better chance to increase in a year than in a week, making the one year option a better deal.
Concept of Time Value of an Option in the context of Real Property
A short definition of Time Value of an Option: The value of an option based on the expiration date. Example: An option to purchase property would be worth less if it expires in one week than it would be if it expires in one year, even though the price and terms are the same. The reasoning is that the value of the property has a better chance to increase in a year than in a week, making the one year option a better deal.
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