Extrinsic Value Calculator (Options)
Splits an option premium into intrinsic and extrinsic (time) value.
Inputs
Option premium
Also called: Premium, option price
Where to find it: Your broker’s option chain (the option’s traded price).
How to derive: The option’s current market price = intrinsic + time value.
Share price
Also called: Stock price, market price
Where to find it: Any finance site (Google/Yahoo Finance) — the current trading price per share.
How to derive: Set by the market; just enter the current price per share.
Share price
Also called: Stock price, market price
Where to find it: Any finance site (Google/Yahoo Finance) — the current trading price per share.
How to derive: Set by the market; just enter the current price per share.
Result, live
Extrinsic value decays to zero by expiry (theta). Negative extrinsic = premium below intrinsic (arbitrage check!).
An option's price is made of two parts: the intrinsic value (what it would be worth if exercised now) and the extrinsic time value on top. This calculator splits the option premium into both — separately for a call and a put.
How the formula works
First the intrinsic value: for a call the price above the strike, for a put the strike above the price (never below zero). The extrinsic value is the rest of the premium:
Extrinsic value = option premium − intrinsic value
Example: premium $8, strike $100, price $105. Call: intrinsic = 105 − 100 = $5 → extrinsic = 8 − 5 = $3. As a put: intrinsic = $0 → extrinsic = $8.
How to read the result
- Positive extrinsic — the normal case; this is the part that melts to zero by expiry (theta).
- Near zero — deep in or out of the money, or close to expiry; little time value left.
- Negative — the premium is below the intrinsic value: a pricing error and a signal for an arbitrage check.
What to watch out for
- Time value decays to zero by expiry — as a buyer you work against the clock.
- It depends on volatility and remaining time, so it is not a fixed cushion but moves with the market.
- Call and put have different intrinsic value — make sure you read the right side.