Option Theta: How Time is Devaluing Your Options
from The Capital Corner Hosted by Investonomics
Welcome back to the Crux of Investing & Finance! This week we dive into the option greek letter of theta, which measures the rate at which time loses value each day with respect to an option contract. It is a part of the extrinsic value of an option, which means it is not derived from the moneyness of the option. Theta is important for traders and investors because it can be the difference between a profitable income strategy and losing money over time if you aren't aware of how this greek operates. Until next time...Jay
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