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  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>The speaker discusses the time value of <a href=\"http://www.mysmp.com/options.html\">options</a>, or <a href=\"http://www.mysmp.com/options/option-greeks.html\">theta</a>.&nbsp; Theta is the value associated to the time component in an option.&nbsp; An option with a greater term to <a href=\"http://www.mysmp.com/options/options-expiration-week.html\">expiration</a> will have theta representing a higherThe speaker discusses the time value of <a href=\"/options\">options</a>, or <a href=\"/options/option-greeks.html\">theta</a>.&nbsp; Theta is the value associated to the time component in an option.&nbsp; An option with a greater term to <a href=\"/options/options-expiration-week.html\">expiration</a> will have theta representing a higher percentage of the option value.&nbsp; He walks through an example of a trader which purchased <a href=\"/options/options-moneyness.html\">deep out of the money calls</a> to take advantage of higher prices in months to come.&nbsp; The problem with this strategy is that the majority of the option premium is theta, or time.&nbsp; As time starts to pass, theta will decay and therefore so will the price of the option.&nbsp; A dramatic move will need to happen to even break even in this type of situation.&nbsp;</p>', created = 1563557178, expire = 1563643578, headers = '', serialized = 0 WHERE cid = '1:d5554cefd9efa02f9f525b26351b39c3' in /var/www/html/mysmp/includes/cache.inc on line 109.
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Futures Options - Theta or Time Decay

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The speaker discusses the time value of options, or theta.  Theta is the value associated to the time component in an option.  An option with a greater term to expiration will have theta representing a higherThe speaker discusses the time value of options, or theta.  Theta is the value associated to the time component in an option.  An option with a greater term to expiration will have theta representing a higher percentage of the option value.  He walks through an example of a trader which purchased deep out of the money calls to take advantage of higher prices in months to come.  The problem with this strategy is that the majority of the option premium is theta, or time.  As time starts to pass, theta will decay and therefore so will the price of the option.  A dramatic move will need to happen to even break even in this type of situation. 

Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

Tradingsim.com
Day Trading Simulator

Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for...

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