Time Decay in Options

    The episode explores the concept of time decay in options trading, drawing an analogy to a person's aging process to illustrate how an option's time value decreases as its expiration nears. It introduces Theta, a metric indicating the rate of this decay, which is negative for long positions, showing daily value loss, and can be positive for short positions, indicating a benefit to the seller. Time decay's impact is examined across Long Call and Put options, where it erodes the option's time value, and Short Call and Put options, where it benefits the seller by reducing the option's value. This dual nature highlights the importance of understanding time decay in option strategies, emphasizing its varying impact on buyers and sellers.

    The Information presented above is for information purposes only, which shall not be intended as and does not constitute an offer to sell or solicitation for an offer to buy any securities or financial instrument or any advice or recommendation with respect to such securities or other financial instruments or investments. When making a decision about your investments, you should seek the advice of a professional financial adviser and carefully consider whether such investments are suitable for you in light of your own experience, financial position and investment objectives.
    IN NO EVENT SHALL SAHM CAPITAL FINANCIAL COMPANY BE LIABLE FOR ANY DAMAGES, LOSSES OR LIABILITIES INCLUDING WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL DAMAGES, LOSSES OR LIABILITIES, IN CONNECTION WITH YOUR RELIANCE ON OR USE OR INABILITY TO USE THE INFORMATION PRESENTED ABOVE, EVEN IF YOU ADVISE US OF THE POSSIBILITY OF SUCH DAMAGES, LOSSES OR EXPENSES.
    Every question you ask will be answered
    Scan the QR code to contact us
    whatsapp
    Also you can contact us via