Theta | Options Trading Concepts



Theta is a metric that looks at the decay of an option’s price over a one day period, all else equal. As premium sellers, theta is always on our side at tastytrade.

29 thoughts on “Theta | Options Trading Concepts”

  1. you basically eliminated option buyers from the perspective, your perspective is completely focused on sellers

  2. You need to slow down. People need to absorb the information. Watching it multiple times doesn't help since you are moving too fast for me to understand. Slowing the video helps but it would be better if you just talked at a normal speed. If you can't do this get someone else to do these videos for you. There is plenty of information and seems well put together but it's worthless if it can't be understood by a new options trader.

  3. This is basically a scheme of a pre mathematical expressions that translated into a program of probability in a huge casino markets. Another word, this predetermined expression can only be won by those who designed them…Wall Streets and its cronies.

  4. I am a professional index option trader. I buy options for the duration of one day to few days based on the parabolic SAR indicator. Presently I buy option at ATM. As per the discussion in the clip above, I am now thinking to move to ITM one or two strike price inside. This should help me reduce impact of theta on buy price. Do you confirm this conclusion?

  5. If I understand the analogy of the two buckets- as time passes the hole in the buyers bucket gets larger, accelerating extrinsic value loss to the seller…

  6. I don't know why anyone would flat out buy an option. Theta will destroy you. You should be using spreads at the very least. Selling premium is the way to go.

  7. If I sold a call and it passed my strike price, is it best to buy to close the option on expiration day because it will have decays more.so if I buy it day expiration I pay more money but ill make more on share price appreciation? Theta is -2.5 7 day option

  8. Wait a sec… so the theta decays faster AND slower as you get closer to the end?! That's it. I quit.

  9. Is there a method in planning your vertical credit spread by checking the theta level prior to opening your trade?

  10. Dead wrong about decay being bad for debit spread. if the both legs are in the money, you won't get the full value until the extrinsic value is decayed.

  11. Bro your video always confuses, you are presuming everyone know about the terminology of what you are talking, you need go little easy you your presentation with good basic examples, so the beginners can also understand
    your videos always sounds like only for professionals
    please you can do much better
    thanks, its my genuine review

  12. Thanks dude, I'm just confused cause I bought a put saying a stock that's 1.020 price would go down to 1.00. At first it went up to 1.200 then now it's 0.98 but I'm still losing -7.50. Expiration date is 06/19. What's up with that loss? I bought at $20 for max profit of $80, the stock is VAL (Valaris plc)

  13. May i know, How theta will behave during holidays.
    I mean, will it get vary because of holidays.

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