The Long-Term Call Option

The greatest inhibiting factor in evaluating calls is time. As a call buyer, you need to continually be aware that expiration forces a decision point; profits have to materialize before expiration, or the call buyer loses money.

The listed option has a life span of only a few months, normally eight or so; the price movement of the stock has to be substantial enough to overcome this time factor. For many buyers, the short life span of calls makes them impractical as a speculative position. To overcome this problem, call buyers may also consider using long
By Michael C. Thomsett
Michael Thomsett is a British-born American author who has written over 75 books covering investing, business and real estate topics.

Copyrighted 2020. Content published with author's permission.

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