Theta is NOT the P/L of an option

In Dynamic Hedging, Nassim writes...

"Almost one century ago, a young French mathematician named Gaston Bachelier had the insight (among other surprising intuitions) to write, in his doctoral thesis, see Bachelier (1900), that the expected price tomorrow of a call value was today's. He gave the right answer to what most option beginners fail to understand: that time decay is not expected P/L from an option. If the option is priced at the right volatility (assuming interest rates are 0), time decay will be expected to be 0."

So what is the true P/L from an option if it is not theta?

 

Change in price - that simple.

 

Theta - gamma costs

 

Theta is a fact -- Taleb and Bachelier notwithstanding.

 

I understand “theta is a fact” but my question is related to P/L of option not being from theta.

 

Can you elaborate for me? And make me aware of theta and gamma relationship.

 

Your 'question' presupposes a wrong-headed premise: that theta does not belong being listed with the primary factors of an option's value. BSM gave us time, distance, rate-of-interest, and volatility.
• Rho? Nobody talks about, as changes (since the 70s) have taken place outside of option life cycles. (Real Option studies are wonderful, though...)
• Theta? You claim it a no-go.

That leaves,
• Delta and
• "Vega"...

Since you know all this, I am left wondering what your real question is.

 

McGinnis, you are off your meds again.

 

All your answers so far has been to a question I never asked. Never said theta isn’t involved in option value, and never said theta isn’t a fact.

Theta isn’t the source of a options P/L for trader.

CAPEESH?

 

You're correct, and your point?