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Time value

 

The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract.

Investopedia Says:
Basically, time value is the value the option has in addition to its intrinsic value.

Related Links:
Move beyond simply buying calls and puts, and learn how to turn time-value decay into potential profits. The Importance of Time Value
Take advantage of stock movements by getting to know these derivatives. Understanding Option Pricing


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In general: price put on the time an investor has to wait until an investment matures, as determined by calculating the Present Value of the investment at maturity. See also Yield to Maturity.

Options: that part of a stock option Premium that reflects the time remaining on an option contract before expiration. The premium is composed of this time value and the Intrinsic Value of the option.

Stocks: difference between the price at which a company is taken over and the price before the Takeover occurs. For example, if XYZ Company is to be taken over at $30 a share in two months, XYZ shares might presently sell for $28.50. The $1.50 per share difference is the cost of the time value those owning XYZ must bear if they want to wait two months to get $30 a share. As the two months pass, the time value will shrink, until it disappears on the day of the takeover. The time that investors hold XYZ has a price because it could be used to invest in something else providing a higher return. See also Opportunity Cost.

WordNet: time value
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Note: click on a word meaning below to see its connections and related words.

The noun has one meaning:

Meaning #1: (music) the relative duration of a musical note
  Synonyms: value, note value


Wikipedia: Time value
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In finance, time value is:

In transport economics, time value refers to:


 
 

 

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Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more
WordNet. WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Time value" Read more