Intrinsic Value for PUT options:
Intrinsic Value = strike price - stock price.
If the stock price is above the strike price, then the option contains no intrinsic value. | Time Value for PUT options:
Time Value = Option Price - Intrinsic Value.
Therefore...
Time Value = Option Price - (Strike Price - Stock Price) | Puts can be in-the-money (ITM), at-the-money (ATM) or out-of-the-money (OTM).
ITM: Stock Price is below the Strike Price of the put.
ATM: Stock Price is equal to the Strike Price of the put. In practice, the strike price that is nearest to the stock price is considered the at-the-money option.
OTM: Stock Price is above the Strike Price of the put. |
