The amount by which an option's premium exceeds its intrinsic value. also called time premium.
The portion of an option premium that is attributed to the amount of time remaining until the option contract expires. Time value is whatever value the option has in addition to its intrinsic value.
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.
The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract.