DEFERRED OPTION MONTH

The latter month or months of an option or futures contract. For example, when considering a three-month option at the time of purchase months two and three could be thought of as deferred. In the second month of ownership, the third month could be considered deferred. As the expiration date of an option nears, its time value diminishes. In terms of future contracts, if today is January 1 and the contract will be settled on September 1, September is considered the deferred month.

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