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Time until Expiration

   Also found in: Dictionary/thesaurus, Encyclopedia, Wikipedia 0.01 sec.
Time until expiration
The time remaining until a financial contract expires. Also called time to maturity.

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.


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It is at the heart of patent law to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time until expiration of the patent, after which expiration the public is free to copy and profit from the invention.
The longer the time until expiration, the more opportunity there is for the stock (and the option) to change in value.
It is statistically more probable that an option with a longer lifespan will become valuable than an option with a shorter time until expiration.
 
 
 
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