How Does the Concept of 'Time Decay' in Options Relate to the Fixed Block Time? ▴ Learn

How Does the Concept of ‘Time Decay’ in Options Relate to the Fixed Block Time?

Time decay, or Theta, in options trading measures the rate at which an option loses value as time passes. It is a constant, predictable drag on an option's price, similar to how the fixed 10-minute block time is a constant, predictable feature of Bitcoin's issuance schedule.

Both represent a fixed rate of change: Theta is the fixed rate of value erosion, and block time is the fixed rate of new supply creation.

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