Copy of Time Is Either Your Best Friend or Your Worst Enemy

Hey all - what a great launch for the world's first and only real professional Income Scanner... Turbo Trader PRO!  If you reach out to the lovely Natasha at info@theturbotrader.com and ask nicely, she might make room for you  :)

For now, a two-part series on Theta, one of the most important option Greeks to know well.  Income traders hold Theta near and dear... so let's dive in.

Part 1 – Theta Made Silly Simple

Most traders hear the word Theta and think it’s a complicated Greek letter only pros understand.

But Theta is just this:

Theta = how much an option loses in value each day because time is passing.Every single option has a “speed limit” on how quickly it melts. Theta is the melt.

break it down like we’re explaining it to a 15-year-old who’s trying to keep their ice cream from melting in the sun.If You BUY Options → You’re Short Theta

This means time is your enemy. Tick, tock...

• If you buy a call or buy a put..

• Every day that passes..

• Your option loses a little value..

• Even if the stock doesn’t move..

You’re hoping the stock moves fast enough to beat the melt.

Think of it like this:You bought an ice cream cone. The sun is melting it. You’d better eat it fast.That melt is Theta.Now, let's flip the script...If You SELL Options → You’re Long Theta

Now time is your friend.

Every day that passes:

• The option you sold loses value...

• Which means you keep that melt...

• You’re basically getting paid for time passing...

This is why pros love Theta:You sell the ice cream to someone else and watch it melt in their hand.

And yes – in most cases: To get long Theta (selling options), you give up Gamma (the ability to achieve leverage from movement in the right direction. ie turn $1 into $5)To get long Gamma (buying options), you give up Theta.

There’s no free lunch. Every Greek has a trade-off. Which Options Melt the Fastest?Three simple rules anyone can understand:

1. Expensive options melt faster

A $5 option (assuming it's all time value) loses more per day than a $3 option, if both have the same number of days left.

2. At-the-money options melt the MOST over time, although out-of-the-money have the ability to collapse earlier.  Few people realize that last part.

3. Theta speeds up when you get close to expiration

The last 30 days?Theta goes from normal melt → vicious melt.

Three months out?Barely melts.

Inside a month?Ice cream on a Florida sidewalk.  Sad face.You don’t have to memorize these – just understand the idea:

• Higher volatility = higher Theta.When options get expensive, the dollar amount they lose each day gets larger too.

• Weekend Theta is sneaky. Market makers adjust option prices on Fridays because the models assume time decay continues on Saturday and Sunday… even though we don’t trade then.  Sorry - I did this to you for years.  No free weekend money.

  
  

Part 2 tomorrow.

And of course… Theta is income, and the tool everybody wants to get their hands on?

Turbo Trader PRO tells you EXACTLY when Theta is working for you – or against you – without you needing to do any complex math.

👉 The full Turbo Trader PRO product page is now open.

P.S.The Black Friday price of $2,987 for one year of access (regular $7,897) is still on - but only if you ask.

Hans "Just Turbo It" Albrecht

Hans Albrecht

CEO and Founder

Options with Hans

Turbo Trader 

Gamma Capital Advisors (RIA consulting arm)