Without a doubt, theta is the most popular and used Greek in options trading. Every trader is lured by the prospect of eating premium from time decay. What is the time value in an option contract? Every options contract has two components: Intrinsic value and time value. The time value component is very high at the start of the options contract, but as time elapses, it starts melting. However, the strange ...
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When you talk about Options trading, there is always a good probability that the discussion will shift to delta, gamma, vega, and theta, known as "Greeks,". They offer insights about how to measure the sensitivity of an option's price to various factors. Take, for instance, the delta measures the sensitivity of an option's premium corresponding to a change in the price of the underlying asset. Theta tells about how the price will change ...
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