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Tag: Theta

Theta depicted as a dancer balancing between call and put options, symbolizing time decay and its impact on option values

Understanding Theta: The Rate of Decline in Option Value with Time

July 30, 2025 FinanceFacts101 Finance Policy

Introduction to Theta Theta, also known as time decay or the rate of decline in option value with time, is a crucial concept when investing in options. Theta refers to the daily loss an option holder experiences as it moves towards maturity. It’s expressed as a negative number for long

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