Theta Decay in Options: Friend or Foe? Conquer Time in Your Trades

Master the clock! Theta decay explained - a friend for option sellers, a foe for option buyers. Learn strategies to combat time erosion and improve your options trading.

Theta Decay in Options: Friend or Foe? Conquer Time in Your Trades

Options Trading a complex and dynamic field, but understanding key concepts like Theta decay can make a world of difference. Theta decay, the gradual decline in the value of an option due to the passage of time, plays a crucial role in the life of every options contract. This article dives deep into the mechanics of Theta decay, offering insights into how you can leverage it as a powerful return generator in your trading strategy.

“Time decay is the ultimate enemy of the options buyer and the best friend of the options seller.” — John Carter

By exploring aspects such as the science behind Theta decay, its impact on option prices, and popular strategies that capitalize on it, you’ll be equipped with the knowledge to navigate the options market with confidence. Whether you’re a day trader or focused on long-term investments, understanding Theta decay is essential for maximizing your potential returns.

Theta Decay: The Basics

Theta decay chart
Image Source: Investopedia

Theta decay, often referred to simply as "Theta," is a critical concept in options trading. It reflects the rate at which an option's value decreases as it approaches its expiration date. Essentially, it's the measure of time decay of an option's premium.

As time passes, the time value of an option erodes, resulting in a lower overall price. For options traders, understanding and leveraging Theta decay can be an essential part of a successful trading strategy. The closer an option gets to its expiration, the more rapidly this time decay occurs. This is often referred to as the "acceleration" of Theta. 

To put this into context, consider an option with a Theta of -0.05. This means that, all other factors being equal, the option’s price will decrease by ₹0.05 for every day that passes. The significance of this is that every day, as an option nears its expiration, it loses value simply due to the passage of time. 

Your ability to navigate and harness Theta decay can differentiate a seasoned trader from a novice. This concept not only influences how you might approach buying options but also plays a crucial role in how you might sell options to capitalize on the steady erosion of time value. 

While Theta decay is a straightforward concept on the surface, its implications can be profound when integrated into a broader trading strategy. Knowing how Theta interacts with other factors—such as volatility and the underlying asset's price movements—can further refine your approach to options trading.

The Science Behind Theta Decay

Theta decay is rooted in the mathematical intricacies of options pricing. Simply put, it quantifies the rate at which an option's premium diminishes as time progresses. This rate of decay accelerates as the option nears its expiration date, primarily because the window of opportunity for the option to become profitable narrows. 

Think of Theta as the silent, tick-tock undertone of the trading world. With every passing day, especially as expiration looms, the time value erodes. This is particularly evident in at-the-money options, where the premium is not purely intrinsic but largely influenced by time. Contrast this with deep in-the-money or far out-of-the-money options, which have minimal time value and, thus, exhibit less pronounced Theta decay. 

The basic formula for calculating Theta is derived from the Black-Scholes model or other complex pricing models. It encompasses various input parameters such as the underlying asset's price, strike price, volatility, risk-free rate, and time to expiration. While the exact calculations can get intricate, the overarching principle remains that time decay is inevitable and thus must be strategically managed. 

Image below is the formula of Theta for Call & Put:

formula of thete for call & put
Image source: simtrade.fr

Furthermore, Theta is not linear. The closer the option gets to expiration, the faster the time decay. This phenomenon is often referred to as the "Theta burn," where options traders experience a rapid decay in the last 30 days of the option's life. Understanding this aspect can be crucial in timing your trades and maximizing returns. 

In essence, while the science behind Theta decay might seem daunting with its blend of financial theory and complex calculations, it boils down to understanding that time is a depreciating asset. Leveraging this can make a significant difference in your options trading strategy.

Impact of Time on Option Prices

 options, time is both an ally and an adversary. Each passing day chips away at the extrinsic value of your options, a phenomenon known as Theta decay. Understanding this can be crucial to maximizing your trading strategy. Let's delve into how exactly time impacts option prices and your portfolio.

How Theta Decay Works: Time decay, represented by the Greek letter Theta (θ), is the erosion of an option's price over time. As an option nears its expiration date, the chance of it ending up in the money diminishes. Consequently, the extrinsic value, or the premium you pay over the intrinsic value, decreases. This decay accelerates as the option gets closer to expiration, forming a non-linear relationship.

Consider this: you have two options with the same strike price, but different expiration dates. The longer-term option will inherently hold more value because it encompasses more time for the price of the underlying asset to move favorably. In contrast, the shorter-term option, being closer to expiration, will suffer greater time decay, thereby having less extrinsic value. 

Look at the below image: 👇

Theta Decay Explanation
image source: optionalpha.com

From a quantitative perspective, Theta measures the amount an option’s price declines daily. For instance, a Theta of -0.05 implies the option’s price will decrease by ₹0.05 every day, assuming all other factors remain constant. This can be both a boon and a bane depending on your position (buyer or seller). 

In essence, managing the impact of time is fundamental to all options trading strategies. Whether you’re buying or selling options, acknowledging how Theta decay influences your portfolio allows you to make informed decisions. For buyers, time is a relentless adversary. Conversely, for sellers, it's a tool to collect premium by strategically writing options that benefit from this decay.

Theta Decay: A Double-Edged Sword

Theta decay is undoubtedly a crucial element in options trading. While it offers some enticing opportunities, it also comes with its own set of challenges. This dynamic nature is what makes it a double-edged sword.

On one hand, time decay can erode the value of long option positions, often working against those who hold calls or puts. But on the flip side, it can be a potent ally for traders employing selling strategies. 

Imagine holding an option as time ticks by. Each day that an option edges closer to its expiration date, Theta works relentlessly, reducing its time value.

If you're a buyer, this diminishing value might feel like watching sand slip through an hourglass, reducing your position's potential profitability. Conversely, for option sellers, Theta decay translates into 'earned' premium, often turning the passing of time into a steady, incremental gain. 

Interestingly, the impact of Theta is not linear. As the option approaches its expiration, the rate of time decay accelerates. This acceleration can either undermine long options rapidly, or enrich sellers promptly as expiration nears. Therefore, understanding this acceleration is crucial for strategic timing in your trades. 

Moreover, the double-edged nature of Theta doesn't stop here. Market conditions play a significant role in how this decay unfolds. Market volatility, interest rates, and sudden price movements can amplify or mitigate the effects of time decay, adding an extra layer of complexity. This is why seasoned options traders continuously monitor not just Theta, but other 'Greeks' as well to gauge the overall risk and reward landscape. 

In essence, mastering Theta decay requires a delicate balance of strategy, timing, and market insight. It can be your greatest ally or your toughest challenge, depending on how well you leverage its dual nature. So, whether you're aiming to capitalize on this decay through selling options or mitigating its effects as an options buyer, grasping the subtleties of Theta can significantly enhance your trading efficacy.

Advantages and Disadvantages of Theta Decay

 and disadvantages of Theta decay can significantly impact your options trading strategy.

Advantages

  • Income Generation: One of the primary benefits of Theta decay is the potential for generating income. By selling options, you can capitalize on the predictable erosion of the option's premium over time, often referred to as collecting 'Theta.' This strategy can be particularly effective in relatively stable markets where price fluctuations are minimal.
  • Predictability: Unlike stock prices, which can be highly unpredictable, the time decay aspect of options is consistent. Theta decay gives you a reliable metric, helping you forecast potential income and manage your options portfolio more effectively.
  • Portfolio Enhancement: Keeping a net positive Theta in your portfolio can serve as a 'theta tailwind,' providing a steady stream of income. It complements other strategies like volatility plays, ensuring that you're continuously generating returns.

Disadvantages 

  • Potential Losses: While selling options can be lucrative, it also means you're exposed to unlimited risk if the underlying asset's price moves drastically against your position. For instance, a significant drop in a stock you're holding calls for could lead to substantial losses.
  • Complexity: Managing Theta decay is far from straightforward. It requires a sound understanding of not just Theta but also other Greeks like Delta, Gamma, and Vega, which can complicate your trading strategy.
  • Market Conditions: In volatile markets, the predictability advantage of Theta decay diminishes. Price fluctuations can overshadow the benefits gained from time decay, making it harder to achieve consistent returns.
  • Limited Upside: When you sell options, your maximum gain is limited to the premium received. This is in stark contrast to buying options, where the upside potential can be significant if the underlying asset moves favorably.

By carefully weighing these advantages and disadvantages, you can make more informed decisions and better harness the power of Theta decay in your trading endeavors.

How Theta Decay Can Benefit Options Traders

Theta decay, often seen as the silent erosion of an option's value, can be a potent tool for options traders. By understanding and leveraging this concept, you have the unique opportunity to formulate a strategy that consistently generates returns over time. 

One primary method to benefit from theta decay is by selling options, especially weekly out-the-money (OTM) call options. When you sell an option, the passage of time works in your favor. Even if the underlying stock remains stable, the option you sold will decrease in value daily, steadily adding to your profits. 

Consider the strategy of selling weekly OTM calls. These options are particularly lucrative due to their rapid time decay as expiration approaches. This accelerated decay can often offset any potential declines in the underlying stock, allowing you to harness theta as a consistent return generator. 

  • Positive Portfolio Theta: Maintaining a portfolio with a positive theta positions you to continually profit from time decay. This 'theta tailwind' can be a steady and predictable source of income.
  • Strategic Flexibility: An understanding of theta decay offers the flexibility to craft strategies that align with your market outlook, whether it's bullish, bearish, or neutral.
  • Reduced Risk of Holding: By selling options instead of buying them, you mitigate your exposure to the detrimental effects of time decay, turning a common risk into a strategic advantage.

Another important point is that in-the-money (ITM) options typically experience less steep theta decay compared to ATM or OTM options. By strategically choosing which options to sell based on their moneyness, you can optimize your returns while effectively managing risk. 

In summary, by selling options and capitalizing on theta decay, you can transform the natural erosion of time value into a reliable profit engine. It requires diligence and strategic planning, but when utilized correctly, theta decay can truly become the cornerstone of a successful options trading strategy.

Risks Associated With Theta Decay

While Theta decay can be an excellent tool for generating returns, it does come with its share of risks. One of the most significant risks is that the value of an option can erode faster than anticipated, especially as it approaches expiration. This rapid decline, often referred to as 'Theta burn,' can catch traders off guard, leading to substantial losses if not carefully managed. 

Another risk linked to Theta decay is the impact of market volatility. When volatility spikes, options premiums tend to increase, which can mitigate the benefits of Theta decay. Conversely, when volatility drops, the rate of Theta decay can accelerate, eroding the option's value more quickly. Understanding the interplay between Theta and Vega (which measures volatility) is essential for managing these risks. 

Theta vs Volatility
Image source: optionseducation.org

Market conditions can also play a crucial role. In a stable market, Theta decay can work predictably in favour of the trader. However, in a volatile or rapidly moving market, sudden price movements can overshadow the steady erosion from Theta, leading to unexpected outcomes. 

Moreover, the strategy of selling options to benefit from Theta decay involves taking on significant risk. As a seller, you might be obliged to buy or sell the underlying asset at an unfavorable price, potentially leading to large losses if the market moves against your position. 

Finally, trading costs and commissions can add up, eating into the gains from Theta decay. Frequent trading to capitalize on time decay may seem beneficial on paper, but once transaction costs are factored in, the profitability can diminish. 

In summary, while Theta decay can be a powerful tool, it is crucial to be aware of its inherent risks. Implementing adequate risk management strategies, staying informed about market conditions, and balancing Theta with other Greeks can help you navigate these challenges effectively.

Day Trading vs. Long-Term Trading: The Role of Theta Decay

 In Day Trading and long-term trading, understanding the role of theta decay is crucial. The strategy you choose can significantly impact how you manage time decay to your advantage.

Day trading involves holding positions for a very short period, often just a few hours or minutes. In this scenario, theta decay might not seem to play a substantial role because the time frame is so brief. However, even in a single day, minor adjustments in an option's premium due to theta can impact profits or losses. For those who day trade, particularly in a highly volatile environment, quick theta decay can still nibble away at premiums, making quick decision-making and timing paramount.

Theta decay explanation
image source: optionalpha.com

In contrast, long-term trading spans weeks, months, or even years, making theta decay a more pronounced factor in your strategy. Options held for extended periods face a more significant and steady erosion due to time decay. By understanding and anticipating this, you can make more informed decisions about when to enter or exit positions.

For instance, an options trader might prefer selling options for a premium and letting time decay work in their favor to pocket the premium as profit over time. This method aligns well with the philosophy of maintaining a positive portfolio theta, where the cumulative effect of time decay acts as a tailwind for the portfolio. 

So, how should you leverage theta decay depending on your trading style? For day traders, the key is to be mindful of how even small time decay can influence short-term trades. For long-term traders, using strategies that benefit from time decay, such as selling options, can be a consistent way to generate returns. Understanding these nuances helps you tailor your approach to the dynamics of time decay in alignment with your investment horizon.

When it comes to leveraging Theta decay, there are several strategies that stand out for their effectiveness. The most common among these is the "Covered Call" strategy. In simple terms, this involves owning the underlying asset and simultaneously selling a call option on the same asset. The premium collected from selling the call option acts as a buffer against minor declines in the stock price, thanks to Theta decay. 

Another highly favored strategy is the "Iron Condor." This consists of selling both a lower strike put and a higher strike call, while simultaneously buying a further out-of-the-money put and call with the same expiration date. The structure of the Iron Condor allows you to profit from the time decay of the four options involved while limiting potential losses. 

For those seeking to capitalize on a more passive approach, the "Cash-Secured Put" strategy can be a good option. Here, an investor sells a put option while keeping enough cash to purchase the underlying asset if the option is exercised. The investor collects the premium from selling the put, benefiting from Theta decay while prepared to buy the stock at a lower price. 

Advanced traders might also opt for "Calendar Spreads." In this strategy, a trader sells a short-term option and buys a longer-term option with the same strike price. This takes advantage of the differing rates of Theta decay between the two options, aiming to profit from the accelerated decay of the short-term option. 

All these strategies have one thing in common: they aim to harness the power of Theta decay to generate consistent returns. As you become more familiar with options trading, experimenting with these strategies can provide valuable insights and potential profitability.

Selling Options to Capitalize on Theta Decay

When you sell options, you essentially act as the insurer, betting that the option will expire worthless so you can keep the premium. This transaction capitalizes on the fact that as time passes, the option's value decreases due to Theta decay. By understanding how to effectively use Theta decay, you can strategically sell options to generate returns consistently. 

Weekly Options Selling: Selling weekly at-the-money calls is a popular strategy among traders. This approach helps you to collect Theta decay quickly since short-term options experience rapid time decay. Imagine it like a melting ice cube; the closer it gets to expiry, the faster it melts, allowing you to capture most of the premium in less time. 

Maintaining a positive portfolio theta is key. By holding high-probability, net positive theta positions, you essentially have a continual source of income from the inevitable decay of time value in options. This method leverages Theta decay to your advantage, turning the passage of time into a money-making mechanism. 

But it’s not just about short-term gains. Selling longer-term options can also be lucrative, albeit with a different risk profile. For instance, a stock replacement strategy might involve selling a longer-term call while holding a bullish outlook on the underlying asset. Here, you benefit from slower Theta decay while still collecting premiums. 

Understanding the intricacies of Theta decay can transform your options trading from speculative bets to a structured income-generating strategy. It's the awareness of these time decay dynamics that empowers you to exploit small, consistent gains over time, laying the foundation for a robust options selling portfolio.

Using Theta Decay for Consistent Monthly Returns

Adopting a strategy centered around Theta decay can indeed help you generate consistent monthly returns. The key lies in understanding and exploiting the way Theta works. Essentially, Theta measures the time decay or erosion of an option's value as time passes. By setting up your trades to capitalize on this natural decay, you can create a reliable income stream. 

One popular method for leveraging Theta decay is selling options, specifically, selling credit spreads. For instance, selling weekly ATM (at-the-money) or slightly OTM (out-of-the-money) options can help you collect Theta premium. These options decay more rapidly as they approach expiration, thus making them ideal candidates for Theta harvesting. If you manage these positions carefully, you can consistently collect premiums that add up to significant monthly returns. 

Consider the example of a trader who sells a portfolio of credit spreads. If each spread generates ₹1.00 of credit, the accumulated positive Theta effect from these trades can contribute an additional ₹17 per day as the options approach expiration. Over the course of a month, this seemingly small daily amount can result in a substantial contribution to your overall income. 

Moreover, by maintaining a positive portfolio Theta, you harness a 'Theta tailwind' that continuously works in your favor, generating income through time decay. This approach allows you to offset potential declines in stock prices, ensuring that your portfolio remains financially healthy. 

However, it's crucial to manage your risk diligently. While Theta decay can be a powerful ally, it can also turn against you if the underlying asset moves significantly against your position. Therefore, successful Theta-based trading also involves prudent risk management practices like setting stop-losses and regularly monitoring your positions. 

Implementing these strategies not only helps you leverage the natural time decay of options but also builds a disciplined trading routine that can deliver consistent returns month after month. Whether you're a seasoned trader or just starting, understanding and applying Theta decay can significantly enhance your options trading success.

Case Studies: Successful Trades Utilizing Theta Decay

Let's dive into a few case studies that highlight how traders have successfully harnessed Theta decay to generate returns. Understanding real-world examples can illuminate the practical applications of theoretical concepts and inspire your trading strategies

Case Study 1: Monthly Income Through Credit Spreads 

One consistent method involved selling a portfolio of credit spreads. Let's consider a trader who sells weekly at-the-money calls, generating ₹1.00 of credit each. These positions collectively earned a positive theta burn of ₹17 per day. The result? A steady stream of monthly income solely from the time decay of these options. This trader maintained a positive portfolio theta, acting as a 'theta tailwind,' which provided an ongoing income stream. 

Case Study 2: Shielding Against Downside Risk 

Another success story is of an investor focusing on selling covered calls. By selling weekly at-the-money options, the trader not only collected premiums but also managed to offset potential declines in the underlying stock’s price. This tactic illustrated how the judicious use of theta decay can serve as a protective measure against market downturns while generating consistent returns. 

Case Study 3: Balancing In-The-Money and Out-Of-The-Money Options 

A sophisticated approach from an options seller included a mix of in-the-money and out-of-the-money options. By balancing these positions, the trader mitigated excessive theta decay on at-the-money options, while still earning from options that were out-of-the-money. This strategy helped in achieving a balanced theta exposure and managing risk effectively. 

These examples underscore the value of understanding and strategically applying Theta decay in your trading endeavors. Whether aiming for monthly income, downside protection, or a balanced risk approach, leveraging Theta decay can serve as a potent tool in your options trading arsenal.

Common Mistakes When Trading With Theta Decay

When you're trading with Theta decay, there's a lot at stake. The allure of time decay can lead to substantial returns, but it's easy to trip up if you're not vigilant. Here are some common mistakes that traders often make when dealing with Theta decay: 

1. Ignoring Market Volatility: Many traders overlook how market volatility can impact Theta decay. A sudden spike in volatility can increase option premiums, eroding anticipated gains from Theta decay. Always keep an eye on volatility metrics like the VIX. 

2. Misjudging Expiry Timing: Timing is everything with Theta decay. Buying at-the-money options a week out can feel like fighting a headwind due to the rapid decay rate. It's crucial to accurately gauge how much time you need for your trades to play out. 

3. Overlooking the Greeks: While Theta is important, it's one of several Greeks that influence option pricing. Neglecting Delta, Gamma, and Vega can lead to an unbalanced strategy. Make sure to balance Theta decay with other Greeks for a well-rounded approach. 

4. Failing to Adjust Positions: Options trading requires active management. Failing to adjust your positions as market conditions change can result in significant losses. Regularly re-evaluate and adjust your trading positions to align with evolving market dynamics. 

5. Ignoring Cost Factors: Transaction costs, including spreads and commissions, can eat into your returns from Theta decay. Ensure that your strategy accounts for these expenses to avoid diminished profits. 

6. Lack of Risk Management: Being too aggressive with short positions can expose you to unlimited risk. Proper risk management strategies, such as using stop-loss orders and position sizing, are crucial to safeguard your capital. 

By avoiding these common pitfalls, you can better harness the power of Theta decay and improve your chances of achieving consistent returns in options trading. Stay informed, remain adaptable, and always consider the full spectrum of market forces at play.

Balancing Theta Decay With Other Greeks

Understanding Theta decay is crucial, but it's just one piece of the puzzle. Theta measures how much an option’s price decreases over time, yet focusing solely on Theta can be detrimental. Balancing Theta with other Greeks like Delta, Gamma, and Vega is essential for a robust trading strategy.

Delta represents the sensitivity of an option's price to changes in the underlying asset's price. While Theta shows how time decay affects an option, Delta indicates how much the option's price will move given a ₹1 change in the asset. This helps you gauge directional risk and potential gains or losses based on movements in the underlying asset.

Gamma, on the other hand, measures the rate of change in Delta for a ₹1 change in the underlying asset. High Gamma can lead to significant swings in Delta, especially for at-the-money options. Understanding Gamma is pivotal when managing positions that are highly sensitive to market movements over short periods, as it can amplify the effects of Theta decay.

Lastly, don’t overlook Vega. Vega quantifies an option’s price sensitivity to changes in implied volatility. Options with high implied volatility carry more extrinsic value, making them more susceptible to volatility shifts. While high Vega options may command higher premiums, they can also experience rapid value declines if volatility decreases, countering any positive Theta effect. 

Balancing these Greeks involves a nuanced approach. One common strategy is to construct a portfolio with a positive Theta to benefit from time decay while managing Delta to stay market neutral. By doing so, you can collect premium without exposing yourself to significant directional risk. 

Additionally, actively monitoring Gamma and Vega ensures that sudden market movements or volatility changes do not erode the Theta gains you aim to achieve. Particularly, Theta-focused strategies should consider the effects of Gamma spikes around option expiration and Vega's impact during earnings seasons or market turmoil. 

Integrating all these Greeks into your strategy will enable you to navigate the complexities of options trading with greater precision. It's about creating a harmonious balance where Theta decay becomes a consistent return generator while Delta, Gamma, and Vega risks are effectively managed.

Tools and Resources for Tracking Theta Decay

 tools and resources that can provide real-time insights and accurate calculations. Whether you're a seasoned trader or a newbie, the right tools can make all the difference.

Options Trading Platforms

Most online brokerage and trading platforms offer built-in tools that calculate and display Theta values for options contracts. Platforms like ZerodhaUpstox, and Sensibull are popular among Indian traders. These platforms not only provide Theta but also other Greeks, allowing you to make more informed decisions. 

Dedicated Software and Apps 

If you're looking for more specialized tools, dedicated options analysis software can be highly beneficial. Programs like GoCharting and Opstra offer comprehensive analytics that include Theta decay tracking. These tools often feature backtesting capabilities, helping you fine-tune your strategies based on historical performance. 

Online Calculators and Websites 

Several online resources provide free Theta calculators. Websites like Samco and Moneycontrol offer intuitive interfaces where you can input your options parameters and instantly receive Theta calculations. These tools are great for quick checks and preliminary analyses. 

Educational Resources 

Books, webinars, and online courses can equip you with the knowledge to better understand and track Theta decay. Consider advanced courses such as Option Strategies: A Mentorship Program by TradePik Academy for in-depth learning. Understanding the theory behind Theta can help you better utilize practical tools. 

By leveraging these tools and resources, you can enhance your ability to track Theta decay and use it effectively to generate returns. Don't underestimate the power of staying informed and equipped!

Expert Tips for Beginners on Theta Decay

Whether you're new to options trading or looking to refine your strategy, understanding Theta decay is crucial. Here are some expert tips to help you navigate this complex aspect of options trading:

  • Start Small: Begin by trading a small number of contracts. This allows you to get a feel for how Theta decay impacts your positions without risking too much capital.
  • Focus on Short Expirations: Options with shorter expiration dates experience faster Theta decay. As a beginner, this can provide a more tangible understanding of how time value erodes.
  • Monitor Your Positions: Keep a close eye on your trades, especially as they approach expiration. The rate of Theta decay accelerates as the expiration date nears, which can significantly affect your profits or losses.
  • Utilize Options Chains: Most trading platforms offer options chains that show the Theta value of various options. Use these tools to compare and choose options with favorable Theta characteristics.
  • Stay Informed: Continuous learning is key. Subscribe to financial news, participate in trading forums, and consider taking advanced courses on options trading to deepen your knowledge of Theta decay and other key concepts.
  • Practice with Paper Trading: Before committing real money, use paper trading accounts to practice. This will help you gain confidence and develop a deeper understanding of how Theta decay impacts your strategy without financial risk.
  • Manage Risk: Balance Theta decay with other Greeks like Delta and Vega to create a well-rounded strategy. Avoid putting all your eggs in one basket by diversifying your positions.

Remember, mastery of Theta decay doesn't happen overnight. By taking a measured and informed approach, you'll be better equipped to use Theta decay as a potent tool in your options trading toolkit.

FAQs About Theta Decay in Options Trading

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