Theta Decay
The rate at which an option's value decreases as it approaches expiry. Options lose time value faster as expiration nears, which benefits option sellers.
Related Terms
Call Option
A derivative contract that gives the buyer the right (but not obligation) to buy an underlying asset...
F&O
Futures & Options. Derivative instruments traded on NSE/BSE that derive their value from underlying...
Futures Contract
A standardized agreement to buy or sell an asset at a predetermined price on a specific future date....
Hedge
An investment strategy to reduce risk of adverse price movements. In India, traders commonly hedge e...
Leverage
Using borrowed capital to increase the potential return of an investment. In F&O trading, leverage a...
Lot Size
The fixed number of shares in one F&O contract. Each stock has a different lot size set by the excha...