For example, an option with one month to expiration that is out of the money will have more extrinsic value than that of an out of the money option with one week to expiration. Another factor that affects extrinsic value is implied volatility. ... If the implied volatility increases, the extrinsic value will increase.

Is money an extrinsic value?

If the price of the $20 strike call option on the $25 stock is $7, the $2 above the $5 intrinsic value is the extrinsic value. Out-of-the money and at-the-money option prices consist of only extrinsic value. This value is often referred to as time premium.

Does money have intrinsic or extrinsic value?

“Money has no intrinsic value, only relative value. Its worth is measured by the ability to exchange it for something of value to the owner.