options time decay

Discussion in 'Options' started by indahook, Aug 1, 2003.

  1. I have recently started trading index options and was curious about the time decay factor. My entries and exits are short term based on my existing trading system. But I am concerned about holding them for more than a week or so. Is there any calculator or software out there that will compute the time decay in realtime or EOD?

  2. vega


    Sorry I don't have time to find them for you, but I know the CBOE has a seven-day option calc that will show you the decay for holding a position for a week. Do a search on google for "options calculator" and I'm sure you will find a good free one that will be you a close enough idea as to what kind of decay you can expect. Remember also that the calcs will assume vol will stay the same, worse case scenarion (always something to consider with options) is that you'll lose on both decay and vol going lower. Best of luck, hope this helps.

  3. Thank you Vega.