How do expiry dates impact a position’s value?
How expiry dates impact a position’s value depends on the product. CFDs don’t have expiry dates and therefore the position’s value is not affected either.
With options, the value of the contract is influenced by the expiry date. After it expires, the contract has no value at all, so the longer it is until the expiry date, the more time the market has to hit the strike price.
The strike price is the price at which an option can be exercised, and the price at which the underlying asset will be bought or sold. This means that if you have two out of the money options with identical strike prices on the same market, the one with the later expiry date has more time to become at the money or in the money.
With futures, you are taking on the obligation to buy an asset at an agreed price when the contract expires. The expiry date does not affect the futures contract’s value, as the contract must be settled, regardless of the market value, or spot price.