Options Beginner Module

Options have a learning curve. The theory and foundation is critical. Every Pro started here

Learn More On Options Time Decay

All Options  are “wasting” assets i.e. their value goes down as the Options approach expiry. In the Options market, Options series expire every month in general, and then there are Weekly or Quarterly expiry series for the bigger stocks and indices. Every Option is exposed to time decay. The less time there is for expiry, the less value an Option will have, and the reverse is also true. We consider the same examples from the Call and Put Option courses – Real estate example for Calls, and Insurance for Puts.  Finally, we take you to a live trading platform and show you Time Decay in Options, in action in the second chapter of this course. We look at real AAPL Options and understand precisely how Time Decay works. Time Decay in Options works exponentially, meaning with lesser and lesser time to expiry, the Option time decay will be more with each passing day. Finally, at expiry, the Option will have only Intrinsic value.

Course Details

Concept of Time Decay in Options

Why are Options referred to as “wasting” assets, and why all Options must expire at some time. Time decay in Options contributes to a majority of strategies, even for Advanced traders.

Real world examples

Discussion of Time Decay in Options using real world examples of Real Estate and buying Insurance. The same examples were used in the Call Options and Put Options courses earlier in this module.

Buyer and Seller differences

Why is Option Time Decay the great “equalizer” between a buyer and seller. Seller advantages are explained in detail, and one of the biggest benefits for a seller is that they benefit from Time decay in Options.

Time decay in Options and Moneyness

The impact of Time decay is very different for Options that are At-The-Money, In-The-Money, and Out-of-the-Money., and this is a strategic cornerstone of Options. These differences can help with optimizing trading strategies.

Option Time Decay Curve

What does the Time Decay “curve” look like. What do we mean by “exponential” time decay and how does this happen. The Option Greek Theta specifies how much an Option will undergo time decay on a daily basis.

Time Decay in action

This is all good in theory – Can we see it in action? ABSOLUTELY!!!! Time decay in Options is demonstrated on a Live trading platform, with a detailed study of 3 different expiries.

For any further information, feel free to contact Option Tiger Experts. Share your details  to get a call back. We would be more than pleased to provide assistance in joining any of our online Options trading courses.

JOIN OUR COMMUNITY FREE

Option Tiger is dedicated to provide comprehensive education and practical learning on Markets and Options trading. Whether you’re a beginner or advanced, get the most sophisticated education content to formulate effective trading strategies & improve ROI.

Get access to Free Courses on Call Options and Put Options

Two Free E-Books and over 30 Mini-Courses on Options

Ongoing Market Updates and 500+ Video Library

 

Get access to Free Courses, E-Books, Market Updates and 500+ Video Library.

Join Free Now!




Futures and Options carry risk and may not be suitable for everyone. OptionTiger is an educational site, and is not a financial adviser or broker. If you need professional investment advice, please consult a registered investment adviser. All stocks, ETFs, commodities, Indices and other securities mentioned in our courses are for educational and illustrative purposes only, including all mention of Returns, Margin Calculations, and different Margin types. By visiting our site and accessing material, you are implicitly agreeing to these terms.
Copyright © 2012 to 2018 - All Rights Reserved by OptionTiger.com