Extrinsic Value vs Premium

The portion of an option's market price above its intrinsic value; also called time value; reflects the time remaining until expiry and the implied volatility of the underlying; declines to zero at expiration regardless of the underlying price.

The upfront price paid by the option buyer to the option seller for the rights conveyed by the contract; the premium is the buyer's maximum possible loss if the option expires worthless; composed of intrinsic value and extrinsic (time) value.