--%>

What is the Theta in option value

What is the Theta in option value?

E

Expert

Verified

Theta: The theta, Θ, is the rate of change of the option price with time.

Θ = ∂V/∂t.

The theta is associated to the option value, the gamma and delta the by the Black–Scholes equation.

   Related Questions in Financial Management

  • Q : Differentiate between compound interest

    Differentiate between compound interest and discounting.

  • Q : Define market participants in the

    Define market participants in the foreign exchange market?The market participants which comprise the FX market can be categorized in five groups: international banks, non-bank dealers, bank customers, FX brokers, and central banks. Internation

  • Q : Empirical studies regarding factors

    Why do you think the empirical studies regarding factors affecting equity returns mainly showed which domestic factors were more significant than international factors, and, secondly, that industrial membership of firm was of little importance in forecasting t

  • Q : How to submit financial management

    Give me steps to submit my financial management problems

  • Q : How is estimate of volatility or the

    How is estimate of volatility or the implied volatility used?

  • Q : Invest through investors the lion's

    What the reason behind invest through investors the lion's share of their funds in domestic securities?Investors invest a lot in their domestic securities since there are significant barriers to investing overseas. The barriers may comprise exce

  • Q : Find QSD and set up

    Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp

  • Q : How a firm can estimate the optimal

    A corporation can have too much working capital. Explain. Explain how can a firm estimate the optimal level of current assets.

  • Q : Explain the concept of the risk–return

    Explain the concept of the risk–return relationship.

  • Q : Explain implied volatility verses

    Explain implied volatility verses strike with a graph.