Why Options Premium Changes Constantly

本站添加: 2026-05-17

[00:00:00]Watch this. Nothing about this contract changes, same strike, same expiration, but the price is moving. Why? Well, it's because the stock price is moving and that's what happens. The value of the option changes in real time. When price moves closer to the strike, the option becomes more valuable. When price moves away, it becomes less valuable. That's intrinsic value changing. But there's something else happening here, too. Even if the price doesn't move much, the option can still lose value. That's extrinsic value shrinking. So, what you're seeing on screen right now is both happening at once. Price is moving, which changes intrinsic value, and time is passing, which slowly removes extrinsic value. That's why premiums move constantly. They're not random.

[00:00:44]They're reacting to where the price is and how much time is left.