If the time to expiration of the underlying stock decreases, then the:
A) value of the put option will increase, but the value of the call option will decrease.
B) value of the put option will decrease, but the value of the call option will increase.
C) value of both the put and call option will increase.
D) value of both the put and call option will decrease.
E) value of both the put and call option will remain the same.

Question

Quizplus · Accepted Answer

The value of both put and call options generally decreases as the time to expiration decreases due to the reduction in time value.

If the Time to Expiration of the Underlying Stock Decreases