Futures options theta question

Discussion in 'Options' started by frostengine, Mar 27, 2006.

  1. Lets say an futures option has a theta of -1.7... does this mean that everyday the price of that option drops 1.7 pts, ignoring the rest of hte pricing formular.... if all other things remain the same the price drops 1.7 pts?

    Or is it like every week it drops that much?

  2. MTE


    Usually theta is based on 1-day change.
  3. Is their a certain time of day when the price begins to reflect the change from theta? or is it just very gradual all day long?
  4. WallStGolfer31

    WallStGolfer31 Guest

    If you got -1.7 from the actual theta equation, you must divide this number by 365 to get what most sites/calculators will quote the theta at.

    Just becasue you got this number from the formula dosen't mean it's reflected everyday. Some days the options will not move at all, other days will account for 2-3 days decay in theta, it just depends. The number you get from the formula is jsut a very good estimate, not definte reality to come.
  5. I got the number from using Interactive broker's option trader screen....
  6. WallStGolfer31

    WallStGolfer31 Guest

    What option is it, just give me the underlying, the strike and exp. I can tell you then.
  7. It was an option on YM April 11600 call