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Description |
This formula returns the time value of an instrument. Time value is the portion of an instrument's price that is in excess of the intrinsic value. For example, if a stock is trading at $10, the $9 call has an intrinsic value of $1; however, the price of the $9 call is not based on how far into the money it is. Instead, the price may be more or less than the intrinsic value. Time value is the difference, positive or negative, between an instrument's price and its intrinsic value.
The time value attempts to quantify the likelihood that an instrument will expire with a profitable settlement. |
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Formula |
TimeValue(instrument)=begin retval = Diff(instrument.recent, IntrinsicValue(instrument)) end |
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Parameters |
instrument The instrument argument specifies which instrument to evaluate. |
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Return Value |
A time value. |
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Examples |
NA |
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Comments |
NA |
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