Hi Trader

This is Dave from stock-commodity-trading.com. Here is a lesson on option price per day trading.

Please only use these examples for educational purposes. Paper trade them.

I was doing my search for option inconsistencies and here is what I found.

I am looking at how much an option costs per day compared to an option from a different month in the same futures market.

March British Pound futures contract closed at 1.4696. (January options follow the March futures)

Jan. British Pound options have 35 days left until expiration. March British Pound options have 91 days left until expiration.

Jan. British Pound 1.4700 Call options settled at .0406. March British Pound 1.4700 Call options settled at .0635.

The March 1.4700 Call is 1.6 times more expensive than The Jan. 1.4700 Call, but it HAS 2.6 times more time left.

Jan. British Pound 1.4700 Put options settled at .0410. March British Pound 1.4700 Put options settled at .0639.

The March 1.4700 Put is 1.6 times more expensive than The Jan. 1.4700 Put but it HAS 2.6 times more time left.

When putting on any calendar spread, buy the cheaper cost per day options and sell the more expensive.

Even if you are not putting on a spread, this is a great way to choose which option to buy or sell.

For more information on these non-directional option techniques, click below:

http://www.deltaneutraltrading.com

take care dave

Rivera Publishing Inc. 1432 E. Gun Hill Rd. New York, NY 10469