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Is the time decay based on "Trading Days" or "Calender Days"/
I beleive that the time decay is based on trading days. In this case, a weekend
will not make a difference.
Girish Patel
BrentinUtahsDixie wrote:
> Hi,
> I may not have your answer, but if the model is using all 365 Callander
> days then the 2 days decay over the weekend would seem to suggest to me
> that buying on Friday may not be as good as waiting until Monday if all
> things remain equal. Seldom though do things remain equal. A substantial
> change in price or volatility will out weigh time decay every time. I have
> wondered why they don't use trading days only to calculate decay. Probably
> it has something to do with interest rates.
> Maybe THE DOCTOR could shed some light on this.
>
> Regards,
> Brent
>
> ----------
> > From: JamesinLA@xxxxxxx
> > To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > Subject: option decay
> > Date: Friday, February 06, 1998 2:15 AM
> >
> > I read somewhere that you should avoid buying options on Fridays because
> > option's decay is recalculated on Mondays. I'm skeptical about this. I
> > always assumed decay is caculated every day. That's how it works on my
> option
> > calculating program. Anyone know about this? Thanks.
> >
> > Jim
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