Submitted by bioknockout t3_11cuh4k in wallstreetbets
dasboot523 t1_ja87lbk wrote
Reply to comment by remindsmeofbae in is there fed roulette this week? by bioknockout
If you understand Calls and Puts you understand Theta. Someone is on the other side of all those trades you make that person is Theta. When you buy a SPY option 1 week to expiration for $300 the person that sold you that contract is hoping it expires worthless. The theta value on a contract is how much the price of an option should decrease each day as the option nears expiration, if all other factors remain the same.
[deleted] t1_ja8mn53 wrote
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