When exercised, theres no fast taxable cash flow, and when held to the essential time period, any earnings on sale is taxed as extended-phrase money gains instead of normal income.
A longer expiration is usually beneficial as the alternative can keep time worth, although the stock more info trades beneath the strike selling price. A choices time price decays as expiration approaches, and options prospective buyers dont want to watch their acquired options drop in worth, most likely expiring worthless When the stock finishes underneath the strike price.