Theta

Theta is the rate at which an option loses value as time passes, all else equal. Premium sellers collect positive net theta. Theta accelerates in the final weeks before expiration, which is why ACondor closes mechanical trades at 21 DTE. At that point, gamma risk (the rate at which delta changes) begins to outpace the remaining theta benefit, and holding into expiration becomes a lottery rather than an edge.

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This site provides general information about ACondor, a software tool for automating options trading strategies. Nothing on this site is investment, tax, or financial advice. Options trading involves substantial risk of loss. Past behavior of any strategy does not guarantee future results. Consult a licensed financial professional before trading options. ACondor may earn a commission from affiliate links at no extra cost to you.