Basically, a possibility can be a security bought from a single Trader to a different. The option customer pays a top quality to the choice writer (the individual offering the derivative).
An extended expiration can be handy since the choice can retain time worth, regardless click here of whether the stock trades down below the strike cost. A choices time benefit decays as expiration methods, and options prospective buyers dont want to look at their ordered options decrease in price, perhaps expiring worthless In case the stock finishes underneath the strike selling price.