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This chapter is from the book

This chapter is from the book

Time Value

The longer the amount of time until an option's expiration, the greater the time value of a particular option will be. This makes sense, because the longer the buyer possesses the right to exercise the option the more valuable that right is. Remember, in commodity trading anything can happen. It is not out of the question for a relatively worthless option to come to life and post abnormal gains (or losses for the seller) by expiration. Keep in mind that this is the exception rather than the rule, but it can and does happen.

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