Chapter 03 · Section 3.1
The time value of a put option 2
An option is traded on a stock whose current market price is $153.00.
The current month is May. The options expire in August.
What is the time value of this option?
a) 3.50
b) $ 0
c) $ 146.00
d) $ 10.50
Time value is one of the two components of the option premium. Intrinsic value is the other component.