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Theta Option Greek

Theta measures the change in the price of an Option with each passing day towards expiry.

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Theta measures the sensitivity of an option to the passage of time. It helps a trader calculate the change in the value of an option with each passing day. Suppose a call option with the spot price of Rs 20 and a theta of -0.10 will decrease in price by Rs 0.10 with each passing day. So in three days' time, the price of the option contract will decrease to Rs 20- (3*0.10)= Rs 19.70.

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