Far Option

Filed Under »
Dictionary Says

Definition of 'Far Option'

The option with the longer time to expiration in a calendar option spread, which involves buying or selling options with different expirations. In such a spread, the shorter-dated option will be the near option. Because far options have more time to attain an in-the-money status, they are associated with larger premiums.
Investopedia Says

Investopedia explains 'Far Option'

For example, a calendar spread strategy may involve selling May calls and buying October calls on the same stock. In this case, assuming it is April, the October calls would be the far options and the May calls would be the near options.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Calendar Spread

    An options or ...
  2. Reverse Calendar Spread

    An options or ...
  3. Horizontal Spread

    An options ...
  4. Vertical Spread

    An options ...
  5. Expiration Date

    The last day ...
  6. Out Of The Money - OTM

    A call option ...
  7. In The Money

    1. For a call ...
  8. Risk

    The chance that ...
  9. Volatility

    1. A statistical ...
  10. Risk Capital

    Investment funds ...

Articles Of Interest

  1. Option Spreads: Introduction

    Learn why option spreads offer trading opportunities with limited risk and greater versatility.
  2. Option Spread Strategies

    Learn why option spreads offer trading opportunities with limited risk and greater versatility.
  3. Option Spreads: Tips And Things To Consider

    Learn why option spreads offer trading opportunities with limited risk and greater versatility.
  4. An Option Strategy for Trading Market Bottoms

    The reverse calendar spreads offers a low-risk trading setup that has profit potential in both directions.
  5. Trading Calendar Spreads In Grain Markets

    Futures investors flock to spreads because they hold true to fundamental market factors.
  6. Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.
  7. Derivatives 101

    Learn how to use this type of investment as an alternative way to participate in the market.
  8. Risk Tolerance Only Tells Half The Story

    Just because you're willing to accept a risk, doesn't mean you always should.
  9. Finding Your Investing Comfort Zone

    Choosing the right investments for you is the best way to feel comfortable with your portfolio.
  10. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center