Capturing Theta

Trading Strategy to profit from Options Theta Decay

 

Introduction to the Theta Plus Time Decay Strategy:

 

Believe it or not, there are 2 facts that govern the actions of all markets. These facts are:

 

1. Markets will move (either up or down)

2. The time value of an option will erode


Theta Plus is a strategy that has been designed to take advantage of both of these facts. Best of all, Theta Plus capitalizes on these facts without forcing a trader to pick direction in the markets. The strategy also works to maintain a delta neutral position, minimizing the risk of unforeseen events that occur in the markets. The strategy is comprised of 2 parts:

 

1. Entering a Theta Positive Position

2. Protecting Theta


Chapters 2 and 3 go in to detail about how each part of the strategy works. When you finish reading this book, you will see how powerful trading the 2 strategies together can be.

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