How linear is Theta on the below graph anyway? Doesn't Theta change all the time? How is it Linear with this basic graph? Are they telling me if I traded KO options vs Tesla options, both their theta decay would still look like this??
Graphical "analysis tab" in TOS will allow you to trade from the graph of all your positions displayed on a graphic within the software. It will show you the change in the Delta and Vega and the effect on changes in the underlying price. Great Tool and will give you answer to your question.
Does Option IV counteract Delta? If you look at any IV graph, IV increases with options that are further away from underlying. IV increases options value. However Delta decreases options value too. Thus in the end, Delta wins even though IV increases like crazy, the option is nearly worthless when far away( but has a high IV though) As the underlying gets closer to strike price, the Delta increases but IV decreases. This is probably the most confusing part to me, does Delta always win? lol. Seems like IV and Delta are always countering each other.