Options Trading Greeks: Theta For Time Decay

Options Trading Greeks: Theta For Time Decay



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https://steadyoptions.com This video shows how the Theta impacts options pricing. It examines few live examples of different options strategies.

The options theta is a measurement of the option’s time decay. The theta measures the rate at which options lose their value, specifically the time value, as the expiration date gets closer.

Generally expressed as a negative number, the theta of an option reflects the amount by which the option’s value will decrease every day. In other words, an option premium that is not intrinsic value will decline at an increasing rate as expiration nears.

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