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A stock is currently selling for $68.96. A call option expiring in 194 days with a...

A stock is currently selling for $68.96. A call option expiring in 194 days with a strike price of $65.00 is selling for $8.12; A put option expiring in 133 days with a strike price of $70.00 is selling for $4.57. What is the put option’s time premium?

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Answer #1
Put option:-
Exercisable only when market price above than the strike price.
Intrinsic value:-
Intrinsic value is difference between current stock price and option strike price.
Time premium of option:-
Time premium is the difference between the Option price and intrinsic value.
S.No. Particulars Reference Amount
1 Stock current price $ A 68.96
2 Strike price of option $ B 70.00
3 Intrinsic value C=A-B 1.04
4 Option price(Premium) $ D 4.57
5 Time value of option E=D-C 3.53
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