What have we learnt?
We have touched down on five main elements that have an impact on the time value of an option:
1. Interest: Rising interest rates result in the premium of call options becoming more expensive
2. Dividend: A dividend payment, in general, causes the price of the call option to go up slightly
3. Underlying value: A move in the underlying value causes changes to the option premium
5. The two most important elements that influence the price of an option and therefore the time value are: