Comment on Theta

Karthik Rangappa commented on 19 Sep 2017, 11:31 AM

No problem, Najeeb. I answered it there as well.

If all else equal, the loss in option premium owing to time decay is equivalent to the theta of the option.

If the volatility increases, then the premiums also tend to increase. This is especially true when there us fewer days to expiry.

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