Once an option s expiration gets closer than 9 months, they become plain options again with an entirely new ticker symbol. For traders with a traditional buy and hold orientation, options usually carry with them the stigma of being short-term trading tools with tax consequences.
Option pricing is based on a variety of factors.
There are seven main components that affect the premium of an option. Each of these factors plays a unique part in the price of an option. In most cases, the first 4 are pretty easy to figure out. The rest are often forgotten or overlooked. However, although they may be a little confusing, each is important.