Option Traders Unite Group Forum » Time decay on option that is making money

Time decay on option that is making money

Nophotosm Brokerage Account

Posted by daggit on March 05, 2010 (05:43PM)

Sorry if this question sounds dumb . I posted it on the option beginners board but I may get a better answer here. Right now I have a good profit on a option I bought that expires in 19 days. I think it may still go up. My question is would time decay on the option hurt me even if the price continues to go up?
Monkey_thumb Brokerage Account

Posted by OldFart on March 11, 2010 (08:54PM)

Daggit - in general time decay will hurt and delta (price moving in the right direction) will help. It really depends which of these two is more powerful and tips the balance in its favor
220px-us_army_paratroopers_fort_bragg_thumb Brokerage Account

Posted by Go White Sox on March 11, 2010 (11:55PM)

Daggit - I believe the deeper your option is in the money the less time decay has on it.
Nophotosm Brokerage Account

Posted by Hsiaowser on March 20, 2010 (10:46AM)

how do you calculate time day?  I've noticed that options seem to decay about .03 cents everyday if you're out of the money, so it's better just to sell if there's not much movement.  just my 0.2 cents.
Nophotosm Brokerage Account

Posted by daggit on March 23, 2010 (03:46PM)

Well I made money on the option but would have made alot more if I would have waited to sell the option (FDO) I think because there was so little time left the time decay wasn't much of a factor and it was in the money. Lesson learned I guess

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