As short premium traders, we typically make our money off of Theta decay. How accurate is theta at predicting daily P/L?
Theta is the theoretical decrease in value of an option with the passage of one day. As we know, theta decay increases as expiration approaches. Does the accuracy of theta as a predictor of daily P/L change with time to expiration?
Tune in to hear Tom and Tony break down the accuracy of Theta as a predictor of daily P/L in today’s Market Measure!
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