What happens to the time value as the stock price rises? Why?

Question

What happens to the time value as the stock price rises? Why?

Answer 1

Stock doesn't have a time value.

Answer 2

You probably didn't get any answers because your question is incomplete. If you are asking about options, here is how it works:

The time value erodes the closer you get to option expiration.

If your option ends in the money, it is all because the stock has risen (if you purchase a call) or because the price has fallen ( if you purchase a put). These are all considered "long strategies". Selling a call is a short strategy, selling a put is a long strategy. If you sell an option, you may have to deliver the underlying stock at or before expiration.

Options with longer expiration dates are generally more expensive than options at the same strike price that expire sooner. Not always, however. At times, options in commodities can be more expensive short term. It depends on the market and volatility. For both stocks and commodities, volatility also affects option prices. For a good article about options, read

WEB RESULTS

Option (finance) - Wikipedia, the free encyclopedia

Commodity market. Money market. OTC market. Real estate market. Spot market ... kinds of stock trades (long and short) allows a variety of options strategies. ...

en.wikipedia.org/wiki/Option_(finance) - 93k - Cached. Hope this helps you. If not, rephrase your question and try again!