vThe Renewal of Options

by David Jenyns on September 21, 2007

vThe Renewal of Options
Options can very often be extended. Suppose you own a Call contract at 54 on a stock which has risen before the expiration of the option to 65. You feel that if you had more time, the stock could go higher—to 75, 80, or more—in another 60 or 90 days. Through your stock-exchange house or your option-dealer, arrangements may be made for an extension of the contract. The cost of an extension, if it can be made, depends on many things: the option price, the price of the stock in the market, the length of time of the extension, and, of course, the willingness of the original maker of the contract to extend the option.

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