You have two options with the same underlying strike price. One has an exercise date in three months, one has an exercise date in six months. Which comes with the greatest risk?

Question

Andy N. · Accepted Answer

The longer the time to expiry or exercise the greater the risk, and correspondingly the higher the premium.

You have two options with the same underlying strike price. One has an exercise date in three months, one has an exercise date in six months. Which comes with the greatest risk?

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You have two options with the same underlying strike price. One has an exercise date in three months, one has an exercise date in six months. Which comes with the greatest risk?

1 Expert Answer

Still looking for help? Get the right answer, fast.

OR

RELATED TOPICS

RELATED QUESTIONS

Gen is interested in seeing how the money grows. Her mom suggests that she take the money in her piggy bank....

Find the equivalent rate of interest for a discount rate of 7.5% for 60 days.

how long would it take to pay off a loan of $2,900 at 11% discount when the bank charges $638?

Micheal wants his $3,200 to grow to $4,500 in 3 years. He has a saving account paying simple interest on savings.

Suppose you were given $1000 from your uncle. You deposited that money in a bank and added $70 per month..

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