Extrinsic Value

What Does It Mean?
What Does Extrinsic Value Mean?
The difference between an option's price and the intrinsic value.
Investopedia Says
Investopedia explains Extrinsic Value
For example, an option that has a premium price of $10 and an intrinsic value of $5 would
have an extrinsic value of $5. Denoting the amount by which the option's price is greater than the intrinsic value, the extrinsic value of the option declines as its expiration date draws closer.
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