Theta
Also called: time decay, option theta
Roughly how much an option's price falls each day from the passage of time alone.
Time decay is slow when expiry is far away and accelerates in the final days, especially for at-the-money options. It works against option buyers and for option sellers, who in return carry gamma and vega risk.
Learn more in these lessons
- Theta, time decay and vegaWhy can an option lose value even when the share moves the right way?
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