This segment of Market Measures takes a closer look at how the width of our wings affect the probability of negative theta in Iron Condors.
As sellers of options, we like positive theta decay. Even though naked positions have positive theta throughout their lifespan, Iron Condors have positive and negative theta.
The study shows us that we have fewer occurrences of negative theta in iron condors the wider we make the wings. Therefore, if we widen the wings, we are more likely to have positive theta.