10.
How long is the life of an option?
There is normally trading in options that
have different lengths of time remaining until expiration - from less than
a month to twelve or more months. The choice is yours. This flexibility
makes it possible to select whichever option best coincides with when you
expect a given price movement to occur.
Example: Buying an option that expires
in October allows three more months for the expected price change to take
place than buying an option that expires in July.
Purchasing a longer option increases the
premium cost of the option somewhat (see question 12) but, as with most
things in life, it's usually best to allow at least a little extra time
for an expected event to occur! Don't hesitate to seek your broker's
assistance in deciding how long an option it would be advisable to consider
purchasing.
877-4LEVERAGE
(877-453-8372) · 305-257-3337
Fax: 305-258-1867
P.O. Box
4479 · Princeton, Florida · 33092
www.fidelityglobal.com
(*Please note: futures and options trading
involves risk of loss and may not be suitable for everyone)
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