Explain why an option's time value is greatest when the stock price is near the exercise price

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Explain why an option's time value is greatest when the stock price is near the exercise price and why it nearly disappears when the option is deep-in- or out-of-the-money?

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Introduction To Derivatives And Risk Management

ISBN: 9781305104969

10th Edition

Authors: Don M. Chance, Robert Brooks

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Question Posted: Apr 07, 2016 08:31 AM

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Explain why an option's time value is greatest when the stock price is near the exercise price

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Time value is a measure of the amount of uncertaint...View the full answer

Introduction To Derivatives And Risk Management

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