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Know your theta
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OT-January 2007-6
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Time eats away at every options position, so it pays to know how time decay affects option prices.
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Detailed Description
Theta, or time decay, may be the most notorious of the five option "Greeks" or factors that control option price moves. It eats away at every option position and is an enemy of option buyers and a friend to option sellers. Whether you buy or sell options, it pays to know how time decay affects an options price, as well as how it interacts with other Greeks.
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