the time value (TV) (extrinsic or instrumental value) of an option is the premium a rational investor would pay over its current exercise value (intrinsic...

and at time t the value of the underlying is S(t), then in an American option the buyer can exercise the put for a payout of K−S(t) any time until the...

option on a stock is often exercised just before the stock pays a dividend that would lower its value by more than the option's remaining time value....

return Net present value Option time value Real versus nominal value (economics) Return on time invested Snowball effect Present value interest factor Gitman...

to value options include finite element methods. As with all securities, trading options entails the risk of the option's value changing over time. However...

A further distinction is that option holders here, i.e. management, can directly influence the value of the option's underlying project; whereas this...

selling options. The calculation of this premium will require sophisticated mathematics. This price can be split into two components: intrinsic value, and...

Expected value Look-through earnings Net realizable value Option (finance) § Basic decomposition Valuation of options § Intrinsic value Option time value Terminal...

cost–benefit analysis and social welfare economics, the term option value refers to the value that is placed on private willingness to pay for maintaining...

In finance, time value is: Time value of money; or Time value of an option. In transport economics, time value refers to: Value of time In photography...

"call the stock away" from the seller. Option values vary with the value of the underlying instrument over time. The price of the call contract must act...

of a derivative instrument such as an option to changes in one or more underlying parameters on which the value of an instrument or portfolio of financial...

over a period of time rather than a single point. As a consequence, it is used to value American options that are exercisable at any time in a given interval...

activity across global time zones. In the case of an FX option on a rate, as in the above example, an option on GBPUSD provides a USD value that is linear in...

some options to time-vest but not performance-vest. This can create an unclear legal situation about the status of vesting and the value of options at all...

vanilla option. If the barrier price has been breached, the knock-in option will trade at the exact same value as the corresponding vanilla option. "Out"...

An Asian option (or average value option) is a special type of option contract. For Asian options, the payoff is determined by the average underlying price...

underlying asset, though it can be found from the price of other options. Since the option value (whether put or call) is increasing in this parameter, it can...

In mathematical finance, a Monte Carlo option model uses Monte Carlo methods to calculate the value of an option with multiple sources of uncertainty or...

the time-step corresponding to option maturity, value is based on moneyness; at earlier nodes, it is the discounted expected value of the option at the...

the option price is then modelled using a lattice with corresponding dimensions: time runs from 0 to maturity; and price runs from 0 to a "high" value, such...

in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest...

is typically negative, reflecting the loss in value due to having less time for exercising the option (for a European call on an underlying without dividends...

(DM Method) is a method for real options valuation. The method provides an easy way to determine the real option value of a project simply by using the...

commonly a call option or a put option. Moneyness is firstly a three-fold classification: If the derivative would have positive intrinsic value if it were...

(intrinsic value) and one that extends for a year rather than six months (time value). Because of the immediate option value, the option purchaser typically...

\\0&{\text{otherwise.}}\end{cases}}} Option time value Intrinsic value Put-call parity McMillan, Lawrence G. (2002). Options as a Strategic Investment (4th ed...

volatility Option time value Moneyness At-the-money In-the-money Out-of-the-money Straddle Option style Vanilla option Exotic option Binary option European...

compound option or split-fee option is an option on an option. The exercise payoff of a compound option involves the value of another option. A compound...

window scale option is an option to increase the receive window size allowed in Transmission Control Protocol above its former maximum value of 65,535 bytes...