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theta definition - finance
Measures the change in the premium of an option and compares it to a one-day change in time-to-maturity. The longer an optionÂ’s time to expiration, the more valuable an option is. High theta options are favored by option sellers because options have a high rate of time decay.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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