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<span id="openzim-page-title" class="mw-page-title-main"><span class="mw-page-title-main">Option time value</span></span>

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<p>In <a href="Finance" title="Finance">finance</a>, the <b>time value</b> (<b>TV</b>) (<i>extrinsic</i> or <i>instrumental</i> value) of an <a href="Option_(finance)" title="Option (finance)">option</a> is the premium a rational investor would pay over its <i>current</i> exercise value (<a href="Intrinsic_value_(finance)" title="Intrinsic value (finance)">intrinsic value</a>), based on the probability it will increase in value before expiry. For an <a href="Option_style" title="Option style">American option</a> this value is always greater than zero in a fair market, thus an option is <i>always</i> worth more than its current exercise value.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> As an option can be thought of as 'price insurance' (e.g., an airline insuring against unexpected soaring fuel costs caused by a hurricane), TV can be thought of as the <i>risk premium</i> the option seller charges the buyer—the higher the expected risk (volatility <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \cdot }">

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</math></span><img src="./ba2c023bad1bd39ed49080f729cbf26bc448c9ba.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: 0.439ex; margin-bottom: -0.61ex; width:0.647ex; height:1.176ex;" alt="{\displaystyle \cdot }" loading="lazy"></span> time), the higher the premium. Conversely, TV can be thought of as the price an investor is willing to pay for potential upside.

</p><p>Time value decays to zero at expiration, with a general rule that it will lose <style data-mw-deduplicate="TemplateStyles:r1154941027">

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</style><span class="frac"><span class="num">1</span>⁄<span class="den">3</span></span> of its value during the first half of its life and <span class="frac"><span class="num">2</span>⁄<span class="den">3</span></span> in the second half.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> As an option moves closer to expiry, moving its price requires an increasingly larger move in the price of the underlying security.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup>

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<div class="mw-heading mw-heading2"><h2 id="Intrinsic_value">Intrinsic value</h2></div>

<p>The <b>intrinsic value</b> (<b>IV</b>) of an option is the value of exercising it now. If the price of the underlying stock is above a call option strike price, the option has a positive intrinsic value, and is referred to as being <a href="In-the-money" class="mw-redirect" title="In-the-money">in-the-money</a>. If the underlying stock is priced cheaper than the call option's strike price, its intrinsic value is zero and the call option is referred to as being <a href="Out-of-the-money" class="mw-redirect" title="Out-of-the-money">out-of-the-money</a>. An out-of-the-money option can nevertheless have an overall positive monetary value prior to expiry due to its time value. If an option is out-of-the-money at expiration, its holder simply abandons the option and it expires worthless. Hence, <i>a purchased option can never have a negative value</i>.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> This is because a rational investor would choose to buy the underlying stock at the market price rather than exercise an out-of-the-money call option to buy the same stock at a higher-than-market price.

</p><p>For the same reasons, a put option is <a href="In-the-money" class="mw-redirect" title="In-the-money">in-the-money</a> if it allows the purchase of the underlying at a market price below the strike price of the put option. A put option is <a href="Out-of-the-money" class="mw-redirect" title="Out-of-the-money">out-of-the-money</a> if the underlying's spot price is higher than the strike price.

</p><p>As shown in the below equations and graph, the intrinsic value (IV) of a call option is positive when the underlying asset's <a href="Spot_price" class="mw-redirect" title="Spot price">spot price</a> <i>S</i> exceeds the option's <a href="Strike_price" title="Strike price">strike price</a> <i>K</i>.

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<dl><dd>Value of a <a href="Call_option" title="Call option">call option</a>: <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \max[(S-K),0]}">

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<annotation encoding="application/x-tex">{\displaystyle \max[(S-K),0]}</annotation>

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</math></span><img src="./fb116e97d8cc93a1dead51f636f0bb12b794f4ce.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:16.031ex; height:2.843ex;" alt="{\displaystyle \max[(S-K),0]}" loading="lazy"></span>, or <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle (S-K)^{+}}">

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<annotation encoding="application/x-tex">{\displaystyle (S-K)^{+}}</annotation>

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</math></span><img src="./76512454a06ad3e98b1ad2e4d4aead4e0f0985fd.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:9.726ex; height:3.009ex;" alt="{\displaystyle (S-K)^{+}}" loading="lazy"></span></dd>

<dd>Value of a <a href="Put_option" title="Put option">put option</a>: <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \max[(K-S),0]}">

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<annotation encoding="application/x-tex">{\displaystyle \max[(K-S),0]}</annotation>

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</math></span><img src="./e80f377a130df665cc1d79ef92b9b9d98908358d.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:16.031ex; height:2.843ex;" alt="{\displaystyle \max[(K-S),0]}" loading="lazy"></span>, or <span class="mwe-math-element mwe-math-element-inline"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle (K-S)^{+}}">

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<annotation encoding="application/x-tex">{\displaystyle (K-S)^{+}}</annotation>

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</math></span><img src="./7b4e4ea86a26a29bb75a4dc4302137f2693c529d.svg" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:9.726ex; height:3.009ex;" alt="{\displaystyle (K-S)^{+}}" loading="lazy"></span></dd></dl>

<div class="mw-heading mw-heading2"><h2 id="Option_value">Option value</h2></div>

<p><b>Option value</b> (i.e.,. price) is estimated via a predictive <a href="Formula" title="Formula">formula</a> such as <a href="Black-Scholes_formula" class="mw-redirect" title="Black-Scholes formula">Black-Scholes</a> or using a <a href="Numerical_method" title="Numerical method">numerical method</a> such as the <a href="Binomial_options_model" class="mw-redirect" title="Binomial options model">Binomial model</a>. This price incorporates the expected probability of the option finishing "<a href="In-the-money" class="mw-redirect" title="In-the-money">in-the-money</a>". For an out-of-the-money option, the further in the future the expiration date—i.e. the longer the time to exercise—the higher the chance of this occurring, and thus the higher the option price; for an in-the-money option the chance of being in the money <i>decreases</i>; however the fact that the option cannot have negative value also works in the owner's favor. The sensitivity of the option value to the amount of time to expiry is known as the option's <a href="Greeks_(finance)#Theta" title="Greeks (finance)">theta</a>. The option value will never be lower than its <b>IV</b>.

</p><p>As seen on the graph, the full call option value (<b>IV + TV</b>), at a given time <i><b>t</b></i>, is the red line.<sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup>

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<div class="mw-heading mw-heading2"><h2 id="Time_value">Time value</h2></div>

<p><b>Time value</b> is, as above, the difference between option value and intrinsic value, i.e.

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<dl><dd><code>Time Value = Option Value − Intrinsic Value</code></dd></dl>

<p>More specifically, <b>TV</b> reflects the probability that the option will gain in <b>IV</b> — become (more) profitable to exercise before it expires.<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> An important factor is the underlying instrument's <a href="Volatility_(finance)" title="Volatility (finance)">volatility</a>. Volatility in underlying prices increase the likelihood and magnitude of a gain in IV, thus enhancing the option's value and stimulating option demand. Numerically, this value depends on the time until the <a href="Expiration_(options)" title="Expiration (options)">expiration date</a> and the <a href="Volatility_(finance)" title="Volatility (finance)">volatility</a> of the underlying instrument's price. <b>TV</b> of American option cannot be negative (because the option value is never lower than <b>IV</b>), and converges to zero at expiration. Prior to expiration, the change in <b>TV</b> with time is non-linear, being a function of the option price.<sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup>

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<ul><li><a href="Intrinsic_value_(finance)" title="Intrinsic value (finance)">Intrinsic value (finance)</a></li>

<li><a href="Naked_call" class="mw-redirect" title="Naked call">Naked call</a></li>

<li><a href="Time_value_of_money" title="Time value of money">Time value of money</a></li>

<li><a rel="nofollow" class="external text" href="https://fundasense.com/strike-price/">Strike Price</a></li></ul>

<div class="mw-heading mw-heading2"><h2 id="References">References</h2></div>

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<li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text">Note, however, that there is also a cost component of holding an option (or any asset), based on the <a href="Time_value_of_money" title="Time value of money">time value of money</a>.</span>

</li>

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</style><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://warsoption.com/basics/option-greeks/option-theta/">"Options Theta"</a>. <i>Warsoption</i><span class="reference-accessdate">. Retrieved <span class="nowrap">9 March</span> 2021</span>.</cite></span>

</li>

<li id="cite_note-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-3">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="http://www.investopedia.com/articles/optioninvestor/07/options_beat_market.asp"><i>Understanding Option Pricing </i></a> Hans Wagner</span>

</li>

<li id="cite_note-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-4">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="http://www.investopedia.com/articles/optioninvestor/07/options_beat_market.asp"><i>Understanding Option Pricing </i></a> Hans Wagner</span>

</li>

<li id="cite_note-5"><span class="mw-cite-backlink"><b><a href="#cite_ref-5">^</a></b></span> <span class="reference-text">Note that the X axis is <i>not</i> time — the graph represents the relationship between price and value <i>at a particular time</i>. With more time left to expiration, the red curve would be higher; the closer to expiration, the more it would approach the blue intrinsic value line.</span>

</li>

<li id="cite_note-6"><span class="mw-cite-backlink"><b><a href="#cite_ref-6">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="http://www.oxfordfutures.com/futures-education/option-premium-valuation.htm"><i>Option premium valuation </i></a> 22 August 2007</span>

</li>

<li id="cite_note-7"><span class="mw-cite-backlink"><b><a href="#cite_ref-7">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="http://demonstrations.wolfram.com/OptionsTimeValue/">Options: Time Value</a>, wolfram.com</span>

</li>

</ol></div></div>

<div class="mw-heading mw-heading2"><h2 id="External_links">External links</h2></div>

<ul><li><a rel="nofollow" class="external text" href="http://biz.yahoo.com/opt/basics5.html">Basic Options Concepts: Intrinsic Value and Time Value</a>, biz.yahoo.com</li></ul>

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</style><div id="Derivatives_market428" style="font-size:114%;margin:0 4em"><a href="Derivatives_market" title="Derivatives market">Derivatives market</a></div></th></tr><tr><td class="navbox-abovebelow" colspan="2"><div><a href="Derivative_(finance)" title="Derivative (finance)">Derivative (finance)</a></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Option_(finance)" title="Option (finance)">Options</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:1%">Terms</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Delta_neutral" title="Delta neutral">Delta neutral</a></li>

<li><a href="Exercise_(options)" title="Exercise (options)">Exercise</a></li>

<li><a href="Expiration_(options)" title="Expiration (options)">Expiration</a></li>

<li><a href="Moneyness" title="Moneyness">Moneyness</a></li>

<li><a href="Open_interest" title="Open interest">Open interest</a></li>

<li><a href="Risk-free_interest_rate" class="mw-redirect" title="Risk-free interest rate">Risk-free interest rate</a></li>

<li><a href="Strike_price" title="Strike price">Strike price</a></li>

<li><a href="Synthetic_position" title="Synthetic position">Synthetic position</a></li>

<li><a href="Greeks_(finance)" title="Greeks (finance)">the Greeks</a></li>

<li><a href="Volatility_(finance)" title="Volatility (finance)">Volatility</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Vanilla_option" class="mw-redirect" title="Vanilla option">Vanillas</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="American_option" class="mw-redirect" title="American option">American</a></li>

<li><a href="Bond_option" title="Bond option">Bond option</a></li>

<li><a href="Employee_stock_option" title="Employee stock option">Employee stock option</a></li>

<li><a href="European_option" class="mw-redirect" title="European option">European</a></li>

<li><a href="Fixed_income" title="Fixed income">Fixed income</a></li>

<li><a href="Option_style" title="Option style">Option styles</a></li>

<li><a href="Warrant_(finance)" title="Warrant (finance)">Warrants</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Exotic_option" title="Exotic option">Exotics</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Asian_option" title="Asian option">Asian</a></li>

<li><a href="Barrier_option" title="Barrier option">Barrier</a></li>

<li><a href="Basket_option" title="Basket option">Basket</a></li>

<li><a href="Binary_option" title="Binary option">Binary</a></li>

<li><a href="Callable_bull/bear_contract" title="Callable bull/bear contract">Callable bull/bear contract</a></li>

<li><a href="Chooser_option" title="Chooser option">Chooser</a></li>

<li><a href="Cliquet_option" title="Cliquet option">Cliquet</a></li>

<li><a href="Compound_option" title="Compound option">Compound</a></li>

<li><a href="Forward_start_option" title="Forward start option">Forward start</a></li>

<li><a href="Interest_rate_option" title="Interest rate option">Interest rate</a></li>

<li><a href="Lookback_option" title="Lookback option">Lookback</a></li>

<li>Mountain range</li>

<li><a href="Rainbow_option" title="Rainbow option">Rainbow</a></li>

<li><a href="Spread_option" title="Spread option">Spread</a></li>

<li><a href="Swaption" title="Swaption">Swaption</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Options_strategy" title="Options strategy">Strategies</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Backspread" title="Backspread">Backspread</a></li>

<li><a href="Box_spread_(options)" class="mw-redirect" title="Box spread (options)">Box spread</a></li>

<li><a href="Butterfly_(options)" title="Butterfly (options)">Butterfly</a></li>

<li><a href="Calendar_spread" title="Calendar spread">Calendar spread</a></li>

<li><a href="Collar_(finance)" title="Collar (finance)">Collar</a></li>

<li><a href="Condor_(options)" title="Condor (options)">Condor</a></li>

<li><a href="Covered_option" title="Covered option">Covered option</a></li>

<li><a href="Credit_spread_(options)" title="Credit spread (options)">Credit spread</a></li>

<li><a href="Debit_spread" title="Debit spread">Debit spread</a></li>

<li><a href="Diagonal_spread" title="Diagonal spread">Diagonal spread</a></li>

<li><a href="Fence_(finance)" title="Fence (finance)">Fence</a></li>

<li><a href="Intermarket_spread" title="Intermarket spread">Intermarket spread</a></li>

<li><a href="Iron_butterfly_(options_strategy)" title="Iron butterfly (options strategy)">Iron butterfly</a></li>

<li><a href="Iron_condor" title="Iron condor">Iron condor</a></li>

<li><a href="Jelly_roll_(options)" title="Jelly roll (options)">Jelly roll</a></li>

<li><a href="Ladder_(option_combination)" title="Ladder (option combination)">Ladder</a></li>

<li><a href="Naked_option" title="Naked option">Naked option</a></li>

<li><a href="Straddle" title="Straddle">Straddle</a></li>

<li><a href="Strangle_(options)" title="Strangle (options)">Strangle</a></li>

<li><a href="Protective_option" title="Protective option">Protective option</a></li>

<li><a href="Ratio_spread" title="Ratio spread">Ratio spread</a></li>

<li><a href="Risk_reversal" title="Risk reversal">Risk reversal</a></li>

<li><a href="Vertical_spread" title="Vertical spread">Vertical spread</a> (<a href="Bear_spread" title="Bear spread">Bear</a>, <a href="Bull_spread" title="Bull spread">Bull</a>)</li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Valuation_of_options" title="Valuation of options">Valuation</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Bachelier_model" title="Bachelier model">Bachelier</a></li>

<li><a href="Binomial_options_pricing_model" title="Binomial options pricing model">Binomial</a></li>

<li><a href="Black_model" title="Black model">Black</a></li>

<li><a href="Black%E2%80%93Scholes_model" title="Black–Scholes model">Black–Scholes</a> (<a href="Black%E2%80%93Scholes_equation" title="Black–Scholes equation">equation</a>)</li>

<li><a href="Finite_difference_methods_for_option_pricing" title="Finite difference methods for option pricing">Finite difference</a></li>

<li><a href="Foreign_exchange_option#Valuation:_the_Garman–Kohlhagen_model" title="Foreign exchange option">Garman–Kohlhagen</a></li>

<li><a href="Heston_model" title="Heston model">Heston</a></li>

<li><a href="Lattice_model_(finance)" title="Lattice model (finance)">Lattices</a></li>

<li><a href="Margrabe's_formula" title="Margrabe's formula">Margrabe</a></li>

<li><a href="Put%E2%80%93call_parity" title="Put–call parity">Put–call parity</a></li>

<li><a href="Monte_Carlo_methods_for_option_pricing" title="Monte Carlo methods for option pricing">MC Simulation</a></li>

<li><a href="Real_options_valuation" title="Real options valuation">Real options</a></li>

<li><a href="Trinomial_tree" title="Trinomial tree">Trinomial</a></li>

<li><a href="Vanna%E2%80%93Volga_pricing" title="Vanna–Volga pricing">Vanna–Volga</a></li></ul>

</div></td></tr></tbody></table><div></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Swap_(finance)" title="Swap (finance)">Swaps</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Amortising_swap" title="Amortising swap">Amortising</a></li>

<li><a href="Asset_swap" title="Asset swap">Asset</a></li>

<li><a href="Basis_swap" title="Basis swap">Basis</a></li>

<li><a href="Commodity_swap" title="Commodity swap">Commodity</a></li>

<li><a href="Conditional_variance_swap" title="Conditional variance swap">Conditional variance</a></li>

<li><a href="Constant_maturity_swap" title="Constant maturity swap">Constant maturity</a></li>

<li><a href="Correlation_swap" title="Correlation swap">Correlation</a></li>

<li><a href="Credit_default_swap" title="Credit default swap">Credit default</a></li>

<li><a href="Currency_swap" title="Currency swap">Currency</a></li>

<li><a href="Dividend_swap" title="Dividend swap">Dividend</a></li>

<li><a href="Equity_swap" title="Equity swap">Equity</a></li>

<li><a href="Foreign_exchange_swap" title="Foreign exchange swap">Forex</a></li>

<li><a href="Forward_rate_agreement" title="Forward rate agreement">Forward Rate Agreement</a></li>

<li><a href="Inflation_swap" title="Inflation swap">Inflation</a></li>

<li><a href="Interest_rate_swap" title="Interest rate swap">Interest rate</a></li>

<li><a href="Overnight_indexed_swap" title="Overnight indexed swap">Overnight indexed</a></li>

<li><a href="Total_return_swap" title="Total return swap">Total return</a></li>

<li><a href="Variance_swap" title="Variance swap">Variance</a></li>

<li><a href="Volatility_swap" title="Volatility swap">Volatility</a></li>

<li><a href="Year-on-year_inflation-indexed_swap" title="Year-on-year inflation-indexed swap">Year-on-year inflation-indexed</a></li>

<li><a href="Zero_coupon_swap" title="Zero coupon swap">Zero Coupon</a></li>

<li><a href="Zero-coupon_inflation_swap" title="Zero-coupon inflation swap">Zero-coupon inflation-indexed</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><div class="hlist"><ul><li><a href="Forward_contract" title="Forward contract">Forwards</a></li><li><a href="Futures_contract" title="Futures contract">Futures</a></li></ul></div></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Contango" title="Contango">Contango</a></li>

<li>Commodities future</li>

<li><a href="Currency_future" title="Currency future">Currency future</a></li>

<li><a href="Dividend_future" title="Dividend future">Dividend future</a></li>

<li><a href="Forward_market" title="Forward market">Forward market</a></li>

<li><a href="Forward_price" title="Forward price">Forward price</a></li>

<li><a href="Forward_contract#Spot–forward_parity" title="Forward contract">Forwards pricing</a></li>

<li><a href="Forward_rate" title="Forward rate">Forward rate</a></li>

<li><a href="Futures_contract#Pricing" title="Futures contract">Futures pricing</a></li>

<li><a href="Interest_rate_future" title="Interest rate future">Interest rate future</a></li>

<li><a href="Margin_(finance)" title="Margin (finance)">Margin</a></li>

<li><a href="Normal_backwardation" title="Normal backwardation">Normal backwardation</a></li>

<li><a href="Perpetual_futures" title="Perpetual futures">Perpetual futures</a></li>

<li><a href="Single-stock_futures" title="Single-stock futures">Single-stock futures</a></li>

<li><a href="Slippage_(finance)" title="Slippage (finance)">Slippage</a></li>

<li><a href="Stock_market_index_future" title="Stock market index future">Stock market index future</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Exotic_derivative" title="Exotic derivative">Exotic derivatives</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Commodity_derivative" class="mw-redirect" title="Commodity derivative">Commodity derivative</a></li>

<li><a href="Energy_derivative" title="Energy derivative">Energy derivative</a></li>

<li><a href="Freight_derivative" class="mw-redirect" title="Freight derivative">Freight derivative</a></li>

<li><a href="Inflation_derivative" title="Inflation derivative">Inflation derivative</a></li>

<li><a href="Property_derivative" title="Property derivative">Property derivative</a></li>

<li><a href="Weather_derivative" title="Weather derivative">Weather derivative</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Other derivatives</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Collateralized_debt_obligation" title="Collateralized debt obligation">Collateralized debt obligation (CDO)</a></li>

<li><a href="Constant_proportion_portfolio_insurance" title="Constant proportion portfolio insurance">Constant proportion portfolio insurance</a></li>

<li><a href="Contract_for_difference" title="Contract for difference">Contract for difference</a></li>

<li><a href="Credit-linked_note" title="Credit-linked note">Credit-linked note (CLN)</a></li>

<li><a href="Credit_default_option" title="Credit default option">Credit default option</a></li>

<li><a href="Credit_derivative" title="Credit derivative">Credit derivative</a></li>

<li><a href="Equity-linked_note" title="Equity-linked note">Equity-linked note (ELN)</a></li>

<li><a href="Equity_derivative" title="Equity derivative">Equity derivative</a></li>

<li><a href="Foreign_exchange_derivative" title="Foreign exchange derivative">Foreign exchange derivative</a></li>

<li><a href="Fund_derivative" title="Fund derivative">Fund derivative</a></li>

<li><a href="Fund_of_funds" title="Fund of funds">Fund of funds</a></li>

<li><a href="Interest_rate_derivative" title="Interest rate derivative">Interest rate derivative</a></li>

<li><a href="Mortgage-backed_security" title="Mortgage-backed security">Mortgage-backed security</a></li>

<li><a href="Power_reverse_dual-currency_note" title="Power reverse dual-currency note">Power reverse dual-currency note (PRDC)</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Market issues</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumer_debt" title="Consumer debt">Consumer debt</a></li>

<li><a href="Corporate_bond" title="Corporate bond">Corporate debt</a></li>

<li><a href="Government_debt" title="Government debt">Government debt</a></li>

<li><a href="Great_Recession" title="Great Recession">Great Recession</a></li>

<li><a href="Municipal_debt" class="mw-redirect" title="Municipal debt">Municipal debt</a></li>

<li><a href="Tax_policy" title="Tax policy">Tax policy</a></li></ul>

</div></td></tr><tr><td class="navbox-abovebelow" colspan="2"><div>

<ul><li><span class="nowrap"><span class="noviewer" typeof="mw:File"></span> </span><a href="Portal%3ABusiness" title="Portal:Business">Business portal</a></li></ul>

</div></td></tr></tbody></table></div></div><div><div class="zim-footer">

This article is issued from <a class="external text" title="Last edited on 2025-06-13" href="https://en.wikipedia.org/wiki/?title=Option_time_value&oldid=1295382192">Wikipedia</a>. The text is available under <a class="external text" href="https://creativecommons.org/licenses/by-sa/4.0/deed.en">Creative Commons Attribution-Share Alike 4.0</a> unless otherwise noted. Additional terms may apply for the media files.

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