/biz/ - Business & Finance

>>18274778
theta gang will bleed you dry
you'll only make money on the amt. of the contract that is in the money, rather than the speculation that it could go up or down based on the theta (adjusted by the delta, gamma and vega)
other greek related memes, have fun making heads and tails of this

after learning about theta, learn about gamma and delta (they affect each other)
theta is time decay
delta/gamma is adjustment of the premium based on movement of the underlying security and some other shit I truthfully don't understand
vega is big IV, also known as big bitch VIX

rho is weird and gay, interest rates don't exist in clown world
find the options formula and do some quick math on existing contracts; then try to paper trade some contracts and learn about being greek neutral (gamma neutral, vega neutral, delta neutral...)
opens new strategies rather than straight up or straight down; also I lost 10k learning this
I want you to succeed; GL

>>16324290
I mean nothing by this, but theta is the simplest greek to learn.

It's time, theta decay is time decay. When it's expiration, end of day on friday, it's 0.
When the theta is close to 0/expiration when your in the money, the price does not fluxuate around based on speculation as much, just pure value of the contract.
When the theta is very high, say when you have like 6 months; the price of the contract can be higher than it's real value

(Example. strike price is 10, stock price is 12; actual value of the contract is worth 200 but can be above that actual value based on bullish signals)
(Example. strike price is 10, stock price is 9; actual value of the contract is 0 but is still worth money thanks to theta; theta to an extent caps your losses)

the others are gnarlier

>>9579083