Jump to navigation Jump atmf investopedia forex search “In the money” redirects here. The time value of an option is the total value of the option, less the intrinsic value. It partly arises from the uncertainty of future price movements of the underlying.

A component of the time value also arises from the unwinding of the discount rate between now and the expiry date. An at-the-money option has no intrinsic value, only time value. For example, with an “at the money” call stock option, the current share price and strike price are the same. Exercising the option will not earn the seller a profit, but any move upward in stock price will give the option value. A call option is in the money when the strike price is below the spot price.