Option value = connotation value+time value The time value of option refers to the time value of option. For example, the option price of a long option is 9, the exercise price is 75, and the futures price at that time is 78, so the connotation value of the option is 3, that is, 78-75, and the time value is 6, that is, 9-3. The time value of options not only reflects the time risk during option trading, but also reflects the risk of market price changes. During the validity period of the option, the change of the time value of the option is a process from big to small, from there to nothing. Generally speaking, the time value of an option is directly proportional to the duration of the option.
Intrinsic value: the actual value of options, that is, probability.
Time value: the financing cost of option investors investing in options.
If the spot price is $2,765,438 +0/2, and the online put option in September is @ 3o = $3 1/8, then 31/8 = 21/2+5/8 (OV = IV TENTV);
When AOL broadcasts @25=$ 1/2 in September, then 1/2 = L/2 (OV = TV);
Aericar online puts @ 25 = $ 13/8 at June 5438+00, so 13/8 = 13/8(OV = TV).
It can be seen that the option in the price is at least equal to its intrinsic value; Out-of-price options only have time value, and the longer the time, the greater the value, because the higher the financing cost.