An options value is comprised of two elements: Intrinsic and extrinsic value. We’ll show you how this is calculated and what it means to your trading.
And depending whether you bought or sold a contract, the ‘time value’ could work to your disadvantage or advantage. We’ll explain why.
- What does it mean to be long or short?
- The process of alerting your broker to your intent – ‘exercise’
- What is the difference between intrinsic and extrinsic value?
- The differences between ‘in’, ‘out’ and ‘at’ the money