Chapter 06 · Section 6.1

Out-of-the-Money

The more an option is out-of-the-money, the greater the risk to a long position holder. It can also be said that for a long option position holder, risk is greater:

• a) the longer the time remaining to expiration.
  No. The longer the time to expiration, the greater the option's opportunity to be profitable and the lesser the risk of the option.
  b) the shorter the time remaining to expiration.

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