Split an option's current premium into its intrinsic value and time (extrinsic) value.
Intrinsic value = max(Spot − Strike, 0) for calls, max(Strike − Spot, 0) for puts. Time value = Current premium − Intrinsic value (never negative in practice, but shown as computed).
Educational tool only — not investment advice. Markets involve risk; past performance and illustrative math don't guarantee future results.