Applies to derivative products. Portion of an option price that is in excess of the intrinsic value, due to the amount of volatility in the stock; sometime referred to as premium. Time value is positively related to the length of time remaining until expiration.
Nearby TermsTime to maturity Time until expiration Time value Time value of an option Time value of money
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University