Theta

From MarketsWiki
Jump to: navigation, search
FTSE Russell banner 2016.gif

Theta is the rate of change of an option price relative to time.[1]

The theta of an option measures the options time decay. It measures the rate at which options lose value, specifically time value, as the date of their expiration nears.

Theta is generally expressed as a negative number.[2]

References

  1. Theta. TheOptionsGuide.org.
  2. Theta. Tasty Trade.