Consider a January 12.5 call and an April 12.5 call. Both are currently very much out-of-the-money....
Consider a January 12.5 call and an April 12.5 call. Both are currently very much out-of-the-money. In response to a $1 increase in stock price,
which call option’s price will increase less in absolute terms?
Homework Answers
The January 12.5 call option will increase less in absolute terms.
The near term option has a lower delta compared to the longer-term option for an out of the money option.
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Consider a January 12.5 call and an April 12.5 call.
Both are currently very much out-of-the-money....
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Question 7:
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Question 7:
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