Time value - Financial definition
Concise definition of the term time value
The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract. Time value is whatever value the option has in addition to its intrinsic value.
Comprehensive definition of the term time value
The premium of an out-of-the-money option constitutes the time value (because there is zero intrinsic value) of the option and reflects the probability that the option will move into-the-money before expiration. There also may be some time value in the premium of an in-the-money option, which reflects the probability of the option moving further into the money.