If abc stock is currently trading at $35.25 and the abc october 35 put option has a premium of 2.25, the time value of this option is: 225.
Time value of this option
Using this formula
Time value of this option= option's premium ×$100
Where:
option's premium=2.25
Let plug in the formula
Time value of this option= 2.25×$100
Time value of this option= =$225
Therefore If abc stock is currently trading at $35.25 and the abc october 35 put option has a premium of 2.25, the time value of this option is: 225.
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