FoundationMultiple choice
Where is the time decay of a long option largest?
- AAt the money, and it accelerates as expiry approaches
- BDeep in the money, where the option is worth most
- CDeep out of the money, where the option is cheapest
- DIt is constant across strikes for a given expiry
The worked solution is in Premium
The answer, the full working and the one idea to take away – for this and all 1,322 questions in the bank. Answer it in practice and your working is marked, with a known mistake named when you make one.
Learn the method
Reported in interviews at
More the greeks and hedging questions
- What is the sign of gamma on a long put?Foundation
- You are long 10 call contracts with delta 0.55, each on 100 shares.Foundation
- Which has more vega: a one-month at-the-money option or a one-year at-the-money…Applied
- You are long a straddle and have hedged the delta.Applied
- A one-year at-the-money call on a non-dividend-paying stock, with positive rates.Applied
- What is the Black–Scholes delta of a one-year at-the-money European put on a…Applied