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How to Calculate the Time Value of an Option
Imran: Intrinsic value in the simplest sense is just how in the money is the option right now? If it was, if it was expiring today, what would it be worth? So from a core options perspective, that hockey stick that we talk about, if the stock is anywhere from strike down, then what's the intrinsic value gonna be? Nothing. And you don't lose anything except when you take and do the count of the premium, which as you say is the green line. Imran: In that graph, you can see that the blue curve is reflecting not only the intrinsic value, but also the time value, right?