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Time

• Is the element which quantifies investment horizons, time remaining to maturity, time remaining to expiration, or time of holding period. It measures the distance between chronological points. Its definition can be complex even when determining the remaining period for an option until its expiration. This is because some practitioners use only business days, others use calendar days, still others base their years on 252, 253, 360, 365 or 366 days (leap years). Also, for modeling purposes some analysts view time discretely while others view it continuously. At the simplest level, this is evident between the difference of simple interest calculations and continuous compounding interest calculations.

 
 Embedded terms in definition
 Calendar
Compounding
Continuous compounding
Expiration
Holding period
Interest
Investment horizon
Its
Maturity
Modeling
Option
Simple interest
 
 Referenced Terms
 Accounts payable management: Management by the firm of the Time that elapses between its purchase of raw materials and its mailing payment to the supplier.

 Accrual bond: A bond on which interest accrues, but is not paid to the investor during the Time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity.

 Adp: Is the Alternative Delivery Procedure at the New York Mercantile Exchange. It provides for longs and shorts to make and take delivery under terms which differ from those specified as good delivery for the contract. These transactions can occur at any Time during a delivery period.

 Aging of accounts receivable: A credit-monitoring technique that uses a schedule that indicates the percentages of the total accounts receivable balance that have been outstanding for specified periods of Time.

 American option: An option that may be exercised at any Time up to and including the expiration date. Related: European optionAn option that may be exercised at any Time during the life of the option. Stock options that trade in U.S. option exchanges, such as the CBOE, are of American types. Index options are of either American (option on S&P100 index, called OEX) or European types (option on S&P500 index, called SPX). See call and put options.

 
 Related Terms
 

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