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URL:  https://boards.fool.com/demotage-you-wrote-im-just-thinking-about-other-31691376.aspx

Subject:  Re: I still don't fully understand time value Date:  3/30/2015  7:36 PM
Author:  joelcorley Number:  11042 of 11356

Demotage,

You wrote, I'm just thinking about other options trades, and I want to understand what I'm doing. ...and I still apparently don't fully understand time value yet.

I'm no expert ... but as I understand it, an option's time value is a product of:

1. Time remaining,
2. Volatility, and
3. Liquidity.

Basically all the factors that are not included in intrinsic value. Obviously if the stock's price changes a LOT, the volatility has risen so it's time value rises - at least relatively speaking. And of course a lack of option interest can result in widening spreads, which you can expect to move against you no matter what position you take.

At least that's how I understand this stuff.

- Joel
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