Time Decay
Posts about theta, time value, and how time decay shapes trade structure choice.
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Trading options for a living looks different from what people picture
My actual day is much closer to a series of check-ins spaced an hour or two apart.
Alpha book up 5.22% on a strong theta week
Weekly update on the Alpha Gen book. Strong week. Alpha Gen up 5.22%, driven almost entirely by the Theta sleeve.
How I pick a short-theta structure by regime
How I think about picking a short-theta structure depending on the regime.
The cleanest way to think about implied vol
The cleanest way I've found to explain why higher implied vol means more time value.
The mindset shift that makes options click
A mindset shift that changes how you think about trading options.
The fly trap
Call butterflies look incredible on paper. Spend $300, make $1,200. That's 4 to 1. Here's what the payoff diagram doesn't show you.
The fly held you hostage
Butterfly spreads look incredible on paper. 10-to-1 payoff. Defined risk. Tight structure. Here's the part that stings.
The better-looking trade is sometimes the worse trade
Remember this... the payoff diagram is a photograph of the last day. It shows you what happens if you hold to expiry, if price lands in the right spot, if everything plays out along one specific path.
Stop buying calls on the bounce
You see a selloff. You think it's overdone. So you buy calls. Then theta eats you alive because vol is through the roof.
A lesson on time value...
Yesterday a subscriber asked a question that sounds like it’s about execution, but isn’t. He’s been long deep ITM GDX LEAP calls for a long time. When price moved, he tried to roll them up.