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Introduction to Time Decay Understanding time decay is crucial when venturing into options trading as it influences an option’s price behavior and premium. Time decay refers to the rate at which an option’s value declines due to the passage of time until expiration (Levy, 2016). As the clock ticks closer
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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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