These do not represent the views of the Economic Times)ĭon’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. Part 1: Options Demystified 301 - Option Greeks (Part 1) Maya then suggested, "Next, let's dive into another important factor that determines option prices, especially when a larger price move is expected, which could be due to an important upcoming event. Traders who are aware of this phenomenon can use it to their advantage and potentially enhance their profitability." Maya agreed, "Absolutely! Time decay can either be a friend or a foe, depending on the strategy employed. She looked stunning as always, conveying a pure desi girl feel. Tara responded, "That's fascinating! It seems like option Theta decay is a powerful concept for traders to understand and utilize in their strategies." Maya Ali made us fall in love with her beauty yet again by uploading gorgeous pictures showing off her dazzling green and pink dress by her own brand, Maya Pret. "If the underlying security remains stable, the trader can profit from the faster decay of the sold option and potentially close the position at a profit." Tara asked, "Ah, so they're capitalizing on the accelerated decay of the shorter-term option?" As time passes, the near-term option will lose value faster due to higher Theta decay, while the longer-term option will retain more of its value." They can sell a near-term option and buy a longer-term option of the same type (Call or Put) and the same strike. Maya explained, "Well, let's say a trader believes that the underlying security will remain relatively stable in the short term but expects increased volatility in the future. Tara exclaimed, "That sounds interesting! How does it work?" The idea here is to take advantage of the different rates of Theta decay between the two options." Traders create these spreads by simultaneously buying and selling options with different expiration dates but the same strike price. "Another popular strategy involving Theta decay is called calendar spreads or time spreads. Are there any other ways traders use Theta decay?" However, by carefully selecting strike prices and managing their positions, traders can mitigate these risks." Maya Pret-a-Porter, founded by Maya Ali, Zainab Qadeer and Ansa Qadeer, is reinventing a whole new approach to fashion, specializing in contemporary festive dresses to ensure you look your finest. The potential losses can outweigh the gains from time decay. If the underlying security moves against the trader's position, losses can be significant. payment EntertainmentFeatured Fashion house Tena Durrani responds to Anam Maliks claim of. Maya Ali rose to prominence after participating in films, including the action-comedy Teefa in Trouble and the romance comedy Parey Hut Love, in which she played the female lead. Maya acknowledged, "Absolutely! Selling options do come with its risk. Tara asked, "But isn't there more risk involved in option writing? The potential losses can theoretically be unlimited, right?" They believe that time decay will work in their favour." Traders using this strategy sell options with high Theta values to capture the decaying time premium. One popular strategy is known as Theta-based options selling or Theta decay harvesting. Maya explained, "Traders can leverage theta decay in several ways. Tara inquired, "So, how do traders utilize Theta in their strategies?" "Furthermore, Theta decay primarily affects options that are out-of-the-money or near expiration, leading to a more rapid decay." Maya Ali has recently shared the wonderful news of launching her own clothing brand Maya Pret-A-Porter with her fans on Instagram. Tara asked, "So, the longer you hold an option, the more it loses value without any price movement." For instance, if the theta of a call option is -0.05, it means the option's value will decrease by $0.05 per day due to time decay." Theta is highest for at-the-money options and decreases as the options move in-the-money or out-of-the-money. It represents the amount by which the option's value decreases every day due to the passage of time, assuming all other factors remain unchanged. Gold Price in Pakistan Today : Lahore, Karachi, Islamabad Cityĭaily Pakistan diligently monitors and updates the current gold rates in Pakistan on a daily basis."Theta measures the rate at which an option loses value over time. The below rates are provided by local gold markets and Sarafa Markets of different cities. Note: The gold rate in Pakistan is fluctuating according to the international market so the price is never been fixed. Likewise, 10 grams of 22k gold were being traded for Rs178,225 while a single tola of 22-karat gold was being sold at Rs 207,898. The price of 10 grams of 24k gold was recorded at Rs191,020. KARACHI – The price of a single tola of 24-karat gold in Pakistan is Rs 222,800 on Tuesday.
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