negative theta
- Thread starter met1989
- Start date
What you've made is called a "long butterfly".
https://www.fidelity.com/learning-c...ons-strategy-guide/long-butterfly-spread-puts
It should be established for a net debit. I am not sure how this is being established for a net credit. However, either way, theta is negative for this type of trade.
EDIT: I got them backwards - Net credit and theta is negative until it trades outside the largest and smallest strike. Check underlying value vs the strikes.
https://www.fidelity.com/learning-c...ons-strategy-guide/long-butterfly-spread-puts
It should be established for a net debit. I am not sure how this is being established for a net credit. However, either way, theta is negative for this type of trade.
EDIT: I got them backwards - Net credit and theta is negative until it trades outside the largest and smallest strike. Check underlying value vs the strikes.
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look here this for the mobile and its postive
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Yes, theta is positive as long as the underlying value is in between the lowest and highest strikes. Otherwise theta goes negative. It is explained in the article I linked you.
Here is what I have found - if my theta is TOO high it mean I have too many positions purely in premium collection strategies. 30% of those are bound to move against you.
I recommend you watch the videos at TastyTrade to learn about managing options. The recommended move is to move up the side that did NOT go against you. This should yield you a credit (assuming you sell these options). But - it also narrows your "break even" territory which lowers your POP. When these things happen, the best thing (after you roll up) is to watch it to see happens, and then take whatever profit you can get, or just close completely for a small loss and start over.
I recommend you watch the videos at TastyTrade to learn about managing options. The recommended move is to move up the side that did NOT go against you. This should yield you a credit (assuming you sell these options). But - it also narrows your "break even" territory which lowers your POP. When these things happen, the best thing (after you roll up) is to watch it to see happens, and then take whatever profit you can get, or just close completely for a small loss and start over.
LOL! Your date is set to 2016!!!
You never show any effort in your questions. I honestly don't know why people keep answering them.
You never show any effort in your questions. I honestly don't know why people keep answering them.
cause ppl are nice ppl want to help the same way i would be if i can help anyone here tell me if i have a position with positive theta regardless of the other greeks does it mean the position is making money ?
I don't want to take the time to check it again but I do have a word of advice.
If you aren't sure if your position is making money you should probably leave options until you are. Things with options can go bad so quickly you really want to be sure footed in that regard.