Extrinsic Value
The difference between an option's price and the intrinsic value.
Investopedia Commentary
For example, an option that has a premium price of $10 and an intrinsic value of $5 would
have an extrinsic value of $5. Denoting the amount that the option's price is greater than the intrinsic value, the extrinsic or time value of the option declines as the expiration date of an option draws closer.
Related Links
Options Basics Tutorial
The ABCs of Option Volatility
See also: Intrinsic Value, Option, Out of the Money, Premium