[期权ABC] Theta：时间背后的秘密

As the expiration date approaches, time value decays in a parabolic manner, leading to a larger negative Theta.

In addition, the difference in Theta among in-the-money, at-the-money and out-of-the-money options becomes larger.

For in-the-money and out-of-the-money options alike, their Theta approaches zero as they near the expiration date because it is less likely for significant changes to occur that might impact their prices. Time value decays rapidly and can run out in advance, which will also push Theta to zero.

For at-the-money options, however, Theta's absolute value becomes larger as the expiration date approaches. This is because at-the-money options have a significant amount of time value, and there is a 50% probability for it to become either in-the-money or out-of-the-money. Therefore, Theta's absolute value becomes larger.

Now that we've learned the features of Theta, you may have a better understanding of the following words: Time is the enemy of buyers and the friend of sellers. During a volatile options market, if you want to go long as a buyer, you must be cautious, especially when holding options with high Theta in absolute terms for a long time.