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Theta
Options
Theta shows how much an option's premium erodes from the passage of one day, with everything else held constant.
It is negative for the option buyer: time value shrinks a little each day, and that decay accelerates as expiration nears, especially for at-the-money options. For the option seller, the same decay works in their favour.
Example
An option with a theta of -0.05 loses about 5 cents a day, or about $5 per 100-share contract, if the stock price and volatility stay unchanged.
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