What Is Theta In Options? - 3 Amazing Facts About Time Decay in Options

Поділитися
Вставка
  • Опубліковано 15 вер 2024
  • What Is Theta In Options? - 3 Amazing Facts About Time Decay in Options
    To get the transcript, go to: www.rockwelltr...
    When you are BUYING options, time decay in options can suck the life out of you.
    But when you are SELLING options, you should forget everything you learned about time decay, because now suddenly THETA is your best friend!
    In this video, I'll show you 3 amazing facts about time decay in options.
    In short, THIS is "Theta in Options Made Simple: What You Need to Know."
    Option Premium Example - A Simple Guide To Options Premium: • Option Premium Example...
    Bid And Ask Meaning In Stock Market? - Bid and Ask Price Explained: • Bid and Ask Price Expl...
    #optiontrading #TimeDecayOptions #TraidingWithMarkus
    =============================================================================================
    ✅ First, subscribe to my channel here so you never miss a new video: bit.ly/3aLKLDz
    📺 Watch My Daily Trading Routine that takes me less than 15 minutes a day: go.rockwelltra...
    📕Get a FREE Hardback Copy Of My New Book “The Wheel Options Trading Strategy”: go.rockwelltra...
    💻 Need a broker? We prefer trading using Tradier! Sign up here: go.rockwelltra...
    📈 TradingView is my favorite charting platform. I use the Pro Version: go.rockwelltra...
    ================================================================================
    tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with Rockwell Trading Services, LLC whereby tastyworks pays compensation to Rockwell Trading Services, LLC to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Rockwell Trading Services, LLC by tastyworks and/or any of its affiliated companies. Neither tastyworks nor any of its affiliated companies is responsible for the privacy practices of Rockwell Trading Services, LLC or this website. tastyworks does not warrant the accuracy or content of the products or services offered by Rockwell Trading Services, LLC or this website. Rockwell Trading Services, LLC is independent and is not an affiliate of tastyworks.

КОМЕНТАРІ • 24

  • @JRInTroy
    @JRInTroy 3 роки тому +1

    Love your content

    • @rockwelltradingservices
      @rockwelltradingservices  3 роки тому

      Hi JRInTroy, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

  • @Alorand
    @Alorand 4 роки тому +2

    Did you already do a video on IV crush?
    Would it be wrong to think of rising volatility as adding more time to the option, and falling volatility as accelerating time decay?

    • @rockwelltradingservices
      @rockwelltradingservices  4 роки тому

      I haven't recorded a video on IV crush. It's on my list of possible topics. ;) As far as the analogy, YES rising IV will increase TIME VALUE (aka extrinsic value) compared to REAL VALUE (aka intrinsic value). But the word "value" is important here...at least to me.

    • @Alorand
      @Alorand 4 роки тому

      @@rockwelltradingservices Thank you. Your videos have been very helpful.
      Especially the one on developing a Trading Plan.

  • @mr.lugomlo5723
    @mr.lugomlo5723 2 роки тому

    Awesome!

  • @rahulagarwal7182
    @rahulagarwal7182 2 роки тому

    Great Video

  • @intikabhabib4438
    @intikabhabib4438 4 роки тому

    Marcus, your heart is into helping us.!!

  • @Emmanuel_360
    @Emmanuel_360 3 роки тому

    Does the Theta. Time decay decreases during overnight and the weekend? or only during trading hours?

  • @woutb.5210
    @woutb.5210 4 роки тому

    Suppose the stock is, for an unknown reason, falling to 13. Is it possible you will be assignt and you have to deliver the shares ?

    • @rockwelltradingservices
      @rockwelltradingservices  4 роки тому

      If we are SELLING a put, we have an obligation to BUY the shares at the strike price we sell. THIS CAN happen. But based the rules we shared in our Theta Kings class, we try to put the odds in our favor by giving us enough room for the stock to move. And normally your'e not assigned immediately if the stock drops below the strike. It's only if the stock drops much lower than the strike OR the stock is below the strike at expiration.

    • @woutb.5210
      @woutb.5210 4 роки тому

      @@rockwelltradingservices is a vertical spread not better ? of course, the gains are limited

    • @rockwelltradingservices
      @rockwelltradingservices  4 роки тому +1

      Usually, there's not enough premium if you trade a spread. Often you're only getting $0.15 - $0.25. Yes, you have downside protection, but it come with a high price. The key question is:
      1.) Do you want to make $600 with no downside protection or
      2.) Do you want to make $250 with $1,000 protection to the downside?
      It really depends what trading style YOU like better. I personally prefer the first. Does this help?

    • @woutb.5210
      @woutb.5210 4 роки тому

      @@rockwelltradingservices It helps a lot. Thanks Markus !!

    • @rockwelltradingservices
      @rockwelltradingservices  4 роки тому

      I am glad that this helps! :)

  • @johnwisdom9208
    @johnwisdom9208 4 роки тому

    Time decay is everything in options; by not understanding it, one is predestined to doom