Comment on Theta

Abhijit commented on 18 Jan 2017, 12:07 AM

Hey Karthik,

You said an option is depreciating asset and premium erodes daily. I can understand this for call option where strike price is greater than spot price. But what about when strike price is lower than spot price already? i.e. ITM
Spot – 8000
Strike – 7700
Premium – 100

Wouldn’t premium will increase in this case as time passes? Call seller is almost certain to lose premium.

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