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Options Crash Course

Options Crash Course: Ep #3 - Extrinsic Value Extras

Options Crash Course

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

After digging into Intrinsic Value and Extrinsic Value a bit in Episode #2, we now want to dive deeper into Extrinsic Value. To do that, we begin with Intrinsic Value, which we learn is completely controlled by the “moneyness” of the option. From there, we can make the leap into appreciating the impact that both time and volatility have on extrinsic value.

At tastytrade, Extrinsic Value alone is arguably the most important concept across all of our strategies.

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