✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: https://geni.us/options-trading-pdf 💰 Get up to $3,000 when you open and fund your first tastytrade brokerage account: https://geni.us/tastytrade 🔥 Learn data-driven options strategies: https://optionsforbeginners.teachable.com/p/data-driven-options-strategies Every option's price consists of the sum of its intrinsic value and extrinsic value. A call's intrinsic value is the difference between the stock price and the call's strike price (when the call is in-the-money). A put's intrinsic value is the difference between the put's strike price and the stock price (when the put is in-the-money). An option's extrinsic value is any value in the option's price that exceeds its intrinsic value. Extrinsic value is sometimes referred to as "time value," and can be conceptualized as the value associated with the potential for that option to become valuable before expiration. Additionally, we've included four visualizations of real call and put examples to demonstrate how intrinsic and extrinsic value change relative to shifts in the stock price. Lastly, we discuss the factors that determine how much extrinsic value an option has. Music: Sophomore Makeout - Silent Partner: https://youtu.be/g2HzEvU1roY tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.