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Time until Expiration |
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Time until expiration Expiration Date The date by which an option contract is abandoned and becomes worthless unless it is exercised. In an option contract, the holder has the right, but not the obligation, to buy or sell (depending on the type of option) the underlying asset within a certain period of time. The expiration date is the time at which the holder will lose the right to exercise the option. A European option can only be exercised on the expiration date, while an American option can be exercised at any point prior to the expiration date. Term to Maturity The amount of time that must elapse before a contract expires. The term to maturity can greatly affect the price of an option or futures contract. It is also called time to expiration. See also: Time value premium. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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