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Understanding Option's TIME VALUE
Click the following links to read each of the articles:
1) More Understanding about Options Time Value
2) Main Factors that Affect Option’s Time Value
3) Option’s TIME VALUE – Putting It Together:
a) Part 1: Understanding What It Is
b) Part 2: Main Factors – Degree of Options Moneyness
c) Part 3: Main Factors – Implied Volatility & Time to Expiration
d) Part 4: Behavior
Related Topics:
* FREE Trading Educational Videos You Should Not Miss
* Options Trading Basic – Part 1
* Options Trading Basic – Part 2
* Understanding Implied Volatility (IV)
* Option Greeks
* Learning Candlestick Charts
* Learning Charts Patterns
* Getting Started Trading
1) More Understanding about Options Time Value
2) Main Factors that Affect Option’s Time Value
3) Option’s TIME VALUE – Putting It Together:
a) Part 1: Understanding What It Is
b) Part 2: Main Factors – Degree of Options Moneyness
c) Part 3: Main Factors – Implied Volatility & Time to Expiration
d) Part 4: Behavior
Related Topics:
* FREE Trading Educational Videos You Should Not Miss
* Options Trading Basic – Part 1
* Options Trading Basic – Part 2
* Understanding Implied Volatility (IV)
* Option Greeks
* Learning Candlestick Charts
* Learning Charts Patterns
* Getting Started Trading
Related Posts:
Option Price Components (Part 1)The price of an option consists of 2 main components:Intrinsic Value and Time Value (Time value is also known as Extrinsic Value).OPTION PRICE = INTRINSIC VALUE + TIME VALUEIntrins… Read More
OPTION PRICING: How Is Option Priced? (Part 1)Option price does not always move in conjunction with the price of the underlying stock. As such, it is important to understand what factors contribute to the movement in the optio… Read More
Option Price Components (Part 2)Go back to “Part 1”EXAMPLES FOR INTRINSIC VALUE & TIME VALUE CALCULATION:For Call Option:Current stock price = $30.The price of Call option with Strike Price of $20 = $12This call … Read More
Option’s TIME VALUE – Putting It Together – Part 1: Understanding What It IsAs mentioned in “Option Price Components”, option price or premium consists of:For ITM Option:Option Price = Intrinsic Value + Time ValueFor ATM and OTM Options:Option Price = Time… Read More
OPTION PRICING: How Is Option Priced? (Part 2)In Part 1, we know that there are 6 factors that affect option's price: option’s strike price, stock price, time to expiration, implied volatility, interest rate, and dividend.Neve… Read More
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