Intrinsic & Time
Value Calculator
Break any option premium into its intrinsic value and time value — see exactly what you are paying for on every call and put.
Option inputs
Premium breakdown
How it's calculated
An option premium is made of two parts — intrinsic value and time value. This tool splits them with the exact textbook formula:
- Intrinsic value is the in-the-money amount. For a call it is
max(0, spot − strike); for a put it ismax(0, strike − spot). It can never go below zero. - Time value (also called extrinsic value) is whatever is left in the premium:
time value = premium − intrinsic value.
Example: a Nifty 23400 call with spot at 23500 and a premium of ₹180. Intrinsic = max(0, 23500 − 23400) = ₹100. Time value = 180 − 100 = ₹80. So ₹100 of the premium is "real" in-the-money value and ₹80 is paid for the time left to expiry, which decays to zero by expiry day.
If time value comes out negative, the quoted premium is below intrinsic value — usually a stale or illiquid quote. Recheck the live figure on the option chain.
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FAQ
What is intrinsic value of an option?
Intrinsic value is the in-the-money portion of the option. For a call it is max(0, spot − strike); for a put it is max(0, strike − spot). An out-of-the-money option has zero intrinsic value.
How is time value calculated?
Time value equals the premium minus intrinsic value. It is the price you pay for the possibility of further gains before expiry, and it decays to zero by expiry.
Why does my time value look wrong?
A zero or negative time value usually means the option is deep in-the-money or the premium quote is stale. Use a live, traded premium from the option chain for an accurate split.