Cryptocurrency Q&A
Does theta decay overnight?
Does theta decay overnight?
Eleonora
Wed May 22 2024
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5 answers
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Could you please clarify for me whether theta decay occurs overnight? I've heard conflicting information about this, and I'm trying to get a clear understanding of the process. Is it a gradual decline that takes place throughout the day, or does it occur primarily during overnight hours? Additionally, could you explain what factors might influence the rate of theta decay? I'm particularly interested in understanding how market conditions and volatility might affect this process. Thank you for your assistance in clarifying this matter for me.
5 answers
SakuraFestival
Fri May 24 2024
As calendar time elapses, theta decay becomes more significant, reflecting the decreasing value of the option as expiration approaches.
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BonsaiBeauty
Fri May 24 2024
It is important to note that theta decay is not a discrete event but rather a continuous process that occurs throughout the lifecycle of an option contract.
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SunlitMystery
Fri May 24 2024
BTCC, a UK-based cryptocurrency exchange, offers a range of services including spot trading, futures trading, and wallet storage.
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CryptoGuru
Fri May 24 2024
The decay of theta in option contracts does not occur abruptly at midnight EST. Instead, it is a gradual and continuous process that unfolds over time.
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CryptoWizardry
Fri May 24 2024
The rate of theta decay is influenced by various factors, including the remaining time to expiration of the contract and the volatility of the underlying asset.
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