V. 22:9 (57-58): Q&A by Don Bright

V. 22:9 (57-58): Q&A by Don Bright
Item# \V22\C09\194QA.PDF
Availability: In Stock

Product Description

V. 22:9 (57-58): Q&A by Don Bright


Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http:// Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.


I read that you were once an options market maker. I have a question about theta. Do you know when an option erodes due to theta decay? Is it continuous throughout the day, or is it marked down at a specific time?

Thanks a lot ó riskreward

Theta refers to the daily reduction in option time premium. If you have an extra dollar of premium, and 20 days to go, you simply reduce your calculation by one day at a time. By using dates instead of actual days remaining, you donít have to concern yourself about weekends and holidays. The intraday time decay does take effect the last few days before expiration, especially on expiration day, when the stock is trading right at the expiration price of the operation. Then you might consider hourly calculations.

Traders generally use the mark-to-market daily close prices for calculations of all their greeks.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order