I keep predicting waves for investing and someone says I’m reading theta. I don’t know what this means. I mean, I Google it but still don’t understand
In: Mathematics
>The term theta refers to the rate of decline in the value of an option due to the passage of time. It can also be referred to as the time decay of an option. This means an option loses value as time moves closer to its maturity, as long as everything is held constant. Theta is generally expressed as a negative number and can be thought of as the amount by which an option’s value declines every day.
(From investopedia)
They imply you read a decline that is natural for options as they reach their due date
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