Given two options with equal strike price on the same underlying, one with an exercise date in a month, the other in three months, which is more valuable?
What is the answer to this question and why?
Is it because of Theta and the value of an option deteriorating the closer it gets to its expiration date?
bump
Depends... Are you long or short...?
The option with the exercise date in 3 months is more valuable due to the option having more time to get in the money or go deeper into the money if already in. Option with exercise date in a month is more certain as to where the price is going to be at expiration.
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