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.
• b) the shorter the time remaining to expiration.
  Yes. The shorter the time to expiration, the lesser the opportunity for the spot market to move with your position and therefore, the greater the risk associated with the option. Continue

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