Options: First Paper Trade

No. I mean it was 52DTE at the point of inception, when the trade was made on 8/9.

 

im not hating...so I will start with a compliment...you are ahead of me when I was 9 months into trading options. Primarily because I was gambling on long options only like a child.

but...but...if you are trading options without a clear understand on something as rudimentary as theta curve...I would personally recommend, pausing and going back to the basics. You must have a strong foundation in anything you seek success in, and it almost seems you are putting the cart in front of the horse a bit.

I would also consider reading through all of the old threads by destriero/atticus as part of your research/education. He is a real deal options OG and although difficult to decipher sometimes...throws out some tips and tricks not commonly found in books.

 

Oh, yeah. I see my mistake. 38DTE. Numbers are starting to get jumbled up! lol

 

Opps. I was thinking of only ShortPut (w/o the LongPut part), and in that case the ratio indeed should be like I said.
I'll need to study/research/test also the credit spread case; I'll then post my findings...

 

Well, I thought I did have a handle on theta decay, which works in favor of the seller.

So you have intrinsic and extrinsic value, with extrinsic being primarily made up of theta. From the long perspective, if intrinsic value for a put is strike minus spot, and you have 3 points of intrinsic, and the premium paid was 4, you would still have 1 point of extrinsic value working against you, representing remaining theta. But if the intrinsic was 4 and the premium was 3, 1 point above parity, then intrinsic would have overcome remaining extrinsic.

Am I off on that?

BTW, I appreciate the compliment.

 

You must really be joking! That @destriero idi? Really? I was thinking he is just an elite spammer.
Just show me one of his postings that is really worth to read for learning something.
And what is his track record in trading? -100% ?

 

I said Theta curve...CURVE. rate of decay change via DTE.
Your OP seemed like you were saying: "I only bought these because I read this time frame was best but I need to look into that more". You really need to look into that more and know exactly why certain time frames are better or worse for various trades.

 

You aren't being serious...right? Bc it's hard to tell sometimes on forums.

 

Oh, okay. I can see where that would help with choice of timeframe. Will make that high on my ToDo list. Thanks.

 

Wow! I just looked that up. One of the critical missing links! Damn... that is exciting! I know how I'll be spending my day. Than you, again, for pointing that out.