Deep ITM Call question

C

Coder2

Hello,

I have noticed that if I purchase an ATM option, the rate of decay is higher than if I purchased a deep ITM option.

If I purchased a deep ITM option, would the rate of decay increase if the underlying moved to reach my strike price?

or would the rate of decay remain low because I originally purchased the option deep ITM, and it is made up of mostly intrinsic value?

Coder :)
 
Quote from Coder2:

Hello,


If I purchased a deep ITM option, would the rate of decay increase if the underlying moved to reach my strike price?
More...

yes. what you're referring to is theta. easy way to think about it is that it moves inversely with gamma
 
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