Is Options time decay is more on weekend?

F&O
1

Dear friends,
I am having doubt on option’s theta time decay.

Let assume I sold strike which is having theta value of 5rs (forget about other Greeks), if next day nifty closes on the same price, then theta value 5 will get reduce right (forget about volatility changes as well), if I do the same on Friday, will I get profit of 5 rs Monday or will i get 3x5rs (sat, sun, mon) on Monday evening?

EXAMPLE:
On thursday I am selling nifty 17000PE as Rs. 300 when nifty is 17400. On next day nifty and all Greeks are remains same then I will get time value (May be Rs. 5 -10) as MTM profit on Friday. If Monday will also nifty closes the same price and same Greek value, will I get profit of 2 days time value or 4 days time value.

Thanks in advance

1 Like
2

Time decay is more on weekends. You would observe a slightly bigger decrease in premium at Friday close itself, everything else being equal.

3

There is no free money in the market.things gets factored in already in pricing before holidays/weekend