Options theta represents the sensitivity of the option's price to the passage of time.

It’s the "time decay" of an option's value.

And it’s critical for traders to understand.

Why?

For traders holding options, negative theta signifies a loss in value every day.

This loss in value can erode potential profits.

Yesterday, I published a step-by-step guide to computing theta in Python with QuantLib.

Grab it below ↓