Can we talk about THETA please.

Discussion in 'Options' started by tradingpoker, Jan 26, 2022.

  1. Looking at the picture below:

    https://gyazo.com/179f748bfbe063e128fd4644150c83a7

    Lets take the 69 calls. THETA is saying -0.58, so this means 58 cents will be taken away from the current strike price right, if the stock did not move for the rest of the day?

    If true when does this get taken out? Throughout the day, end of day, start of day?

    Does anyone trade THETA into the weekend? How do we know how much THETA comes out at the weekend?

    Thank you for any help.
     
  2. I would head to Dest Journal, he’s a genius with options in my humble view. Seriously, he’s good!
     
    tradingpoker likes this.
  3. Robert Morse

    Robert Morse Sponsor

    It does not get "taken out". It means if none of the assumptions to the model change, that is the expected decay in value over the course of the day with the stock at the same price. The Greeks are estimates, not hard values. As IVol and the stock change in price, some of the price change is not related to just time decay.
     
  4. Robert is a pro trader too, should have mention that.
     
  5. zghorner

    zghorner

    too late now he hates you.
     
    taowave likes this.
  6. Robert is a former floor trader, it takes a lot to chaff his hide :)
     
    zghorner likes this.