Скачать или смотреть Intrinsic vs Extrinsic Value (5mins.) | Options for Beginners

Unlike stocks, options have an expiration date and so because they have a finite lifespan, all else being equal, their value will decay over time.

For this reason, an option's premium (price) is composed of two distinct components: Intrinsic value and time, or extrinsic value.

This video defines and breaks down the difference, with two very simple examples, in under 5 minutes...

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Video Chapters:

0:00 Intro.
0:24 The two components of an option's price: intrinsic & extrinsic value.
0:43 What is intrinsic value?
0:49 What is extrinsic value?
1:05 Intrinsic & extrinsic components of a call option's price.
2:26 Intrinsic & extrinsic components of a put option's price.
3:11 Factors affecting extrinsic value.
3:39 Summary.
4:12 Outro.

#IntrinsicValue #ExtrinsicValue #Options

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