Because of the greater time value,a call writer who closes the position prior to expiration will always pay more for the call than if the position were held to expiration.

Question

Quizplus · Accepted Answer

The cost to close a call position prior to expiration can be higher or lower than at expiration, depending on market conditions and the underlying asset's price movement. Time value decreases as expiration approaches, but other factors like volatility and the asset's price can increase or decrease the call's value.

Because of the Greater Time Value,a Call Writer Who Closes