Comment on Theta

Ankit commented on 22 Apr 2017, 03:39 PM

Hello sir,
I tried it but did not get results
Ex:- For Otm (CE)options if premium is at 8 then, as per formula
Time value =premium-intrinsic value
Since,intrinsic value is 0 for OTM so, all the premium is for time value
BUT in case of ITM option where premium contains Non zero number for
both Intrinsic and time Premium not maching with formula i saw in many strikes the ITM’s time value coming in MINUS NUMBER
EX:-
PREMIUM= Intrinsic+time
35=40(int value) + time value
Time value =35-40 =-5
what this suggests is premium drop for time is more than is should be???????

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