How does negative theta affect the pricing of digital currencies?

1 answers

• Lauritsen BallAug 03, 2024 · a year ago
  Negative theta affects the pricing of digital currencies by putting downward pressure on their value. Theta measures the time decay of an option, indicating how much value the option loses as time passes. When theta is negative, it means that the option's value decreases over time. In the context of digital currencies, this means that the value of options related to cryptocurrencies will decrease as time goes by. As a result, the pricing of digital currencies can be negatively affected. It's important to note that negative theta is just one factor among many that can influence the pricing of digital currencies, but it can play a significant role in determining their value.
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