Options
Extrinsic Value
The portion of an option's premium that exceeds its intrinsic value, representing time value and implied volatility. Extrinsic value decays as expiration approaches, a phenomenon known as theta decay.
Options
The portion of an option's premium that exceeds its intrinsic value, representing time value and implied volatility. Extrinsic value decays as expiration approaches, a phenomenon known as theta decay.