Option Intrinsic and Time Value Calculator
Every option premium is the sum of two parts: intrinsic value, the amount already in the money, and time value, the premium paid for the remaining chance of further gains before expiry. This calculator splits any call or put premium into both components and tells you whether the option is in, at or out of the money. Enter the option type, underlying price, strike and the current premium.
Intrinsic and time value formula
Call intrinsic = max(0, underlying - strike)
Put intrinsic = max(0, strike - underlying)
Time value = premium - intrinsic value
Time value % = time value / premium * 100
Intrinsic value is never negative. If the premium is below the intrinsic value (which would imply arbitrage), the time value shows as a negative number, signalling a stale or mismatched input.
Worked example
A call with underlying $105, strike $100, premium $7. Intrinsic value = max(0, 105 - 100) = $5.00. Time value = 7 - 5 = $2.00. The option is in the money (underlying above strike). Time value is 2 / 7 * 100 = 28.57% of the premium.
Intrinsic and time value: frequently asked questions
What is intrinsic value?
Intrinsic value is the in-the-money portion of an option, the amount you would gain by exercising immediately. For a call it is max(0, underlying price - strike). For a put it is max(0, strike - underlying price). It can never be negative.
What is time value?
Time value (extrinsic value) is the part of the premium above intrinsic value. It equals option premium minus intrinsic value. It reflects the chance the option moves further in the money before expiry and decays toward zero as expiration approaches.
What does moneyness mean?
Moneyness describes the strike relative to the underlying. A call is in the money when the underlying is above the strike, at the money when equal, and out of the money when below. For a put the directions reverse. Out-of-the-money options have zero intrinsic value, so their entire premium is time value.
Sources and method
- U.S. Securities and Exchange Commission investor education on options: Investor.gov: Options.
- Method: the standard definition of intrinsic and extrinsic (time) value; a public options concept. No proprietary data is used.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.