As we’ve shown before, there are always three potential elements at play with the profitability of our option positions: delta, theta, and vega. What we haven’t shown before, however, is a concrete example that illustrates exactly how these three variables are all working in unison to determine your day-to-day profitability.
So today, we offer two examples: one with more gradual changes from one day to the next and another where things go a bit haywire on the final day.
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