To The Moon

In the stock market, when prices go sideways, traders often feel stuck—it’s what they call “dead time.” But in the options market, time is never still. It’s always ticking, always affecting your position. So why does time value matter so much in options?

📘 In the Options Handbook, here’s how time value is explained:

▶ What Is Time Value in Options? 🙋‍♂️

Time value reflects the market’s evaluation of future potential before expiration.

• Say a Call option is trading at $25, and its intrinsic value is $20 (that’s how much you’d make if you exercised it now).

• The extra $5 ($25 - $20) is the time value—the market’s bet on future price movement.

▶ Time Works Against the Buyer 💸

As expiration gets closer, the market puts less value on big price moves. Time value fades a little each day—slowly chipping away at your option’s worth.

If you're the buyer, even if the stock moves in your favor, you might still lose money if time decay eats into your potential gains.

▶ Time Works for the Seller 💡

If you're the seller, time is on your side. With each passing day, the chances of the option ending up in the money get smaller.

As time value fades away, that lost value becomes your gain—whether the market moves or stays flat.

🎁 This is just a glimpse. The Options Handbook dives deeper into the mechanics of time decay, complete with charts and strategies. Now available in the Tiger Coin Center! 🛒

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>> Click here for the Simplified Chinese version <<