How Does Time Decay (Theta) Counteract the Effect of Rising IV? ⎊ Path

How Does Time Decay (Theta) Counteract the Effect of Rising IV?

Time decay (negative Theta) constantly erodes the value of a long option position, while rising IV (positive Vega) increases its value. These two forces work against each other.

If the rise in IV is not fast or large enough to offset the Theta decay, the option's price will still fall.

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