One of the item to look out for while trading options is the theta . Theta shows the rate of decline in value of the option due to time decay . Eg if it is 40 theta it will mean that is decays by about 0.40 cents per day . When you sell an option , theta decay would be in your favour ! if one's risk tolerance is higher can choose for a higher theta decay , better returns too! If risk tolerance is low , one may consider to choose a longer expiration date but do note the theta is much slower . As per the example below . It is always about risk and rewards ...Good Luck!
Do you use theta? (Single choice)Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
