Options are comprised of two values – intrinsic value and time value.  The intrinsic value reflects the current value of the option if it expired today while the time value reflects the excess premium you must pay for any future potential movement in the underlying.  On the graphics in our educational series, we show the profile for how in the money options have the highest intrinsic value and low relative time value, while out of the money options have no intrinsic value and low relative time value.  It is at the money options that have the highest amount of relative time value.