Theta Option Greek

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

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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