Comments on: How Does Option Time Decay Work?

By: Genius

Genius — Mon, 17 Oct 2011 19:07:29 +0000

Time decay works similar in weeklies but at a much more rapid pace. That is why you really cannot adjust a weekly trade very much. its like trading options on speed.
Watch the theta of the trade. If you are long option see how fast the theta increase. the theta will tell you how much value the option will lose.

By: kanu

kanu — Sat, 15 Oct 2011 06:47:34 +0000

correction : ” in weekly options”

By: kanu

kanu — Sat, 15 Oct 2011 06:45:56 +0000

genius,can u explain how options time decay works, u only talk about 30 ,40 days. by the way cote me if iam wrong, selling option require bigger account ??? and most broker will not allow selling i ira accounts

By: Genius

Genius — Fri, 09 Sep 2011 19:51:13 +0000

Robert, you will get direction on that once you join. The money for adjustments is accounted for as part of the total account. I uses $10,000 as an example account and do not use more than that.

By: robert owens

robert owens — Fri, 09 Sep 2011 19:29:47 +0000

Great info. I will be joining next months newsletter. What is a good percentage of total assets to set aside for adjustments and how often do they happen? Thanx robert

By: David

David — Thu, 12 Aug 2010 21:59:08 +0000

Another thing is the Delta on leaps is lower than closer months as the closer months are more likely to expire in the money. So the closer months move more $ per $ with the stock . example – AIG 30 call delta is .7575 for the Feb 2011 and the Sept 2010 is .8455

By: Genius

Genius — Thu, 04 Mar 2010 00:00:40 +0000

LEAPS still have to deal with theta decay. But they are an alternative to stock if you only want to be in a trade for a few months. The trick is to know which strike to buy.

By: Edward G. Hemmings

Edward G. Hemmings — Wed, 03 Mar 2010 20:25:13 +0000

Why not then buy only LEAPS for one year, where you have reason to believe the stock will rise over the next four to six months, rather than buy the stock ?