I had an NVIDIA contract expiring this Friday and after the run it went on last night I expected to just cash the contract at open. I waited 2 minutes going from +100 to -80 in quite literally 2 seconds. I thought theta was gradual to start with. All of the predictions I saw said I wasn’t going to lose money to theta until like 3 hours from now.
I feel like I got cheated somehow. Is this normal?
Posted by Bluehaven11
4 Comments
IV crush? What was the strike?
$1,180 strike is a long way to go, even for NVDA with only 2 days until expiration. Time decay works super fast, especially after earnings is now a known event.
Can’t believe no one thinks NVDA has another +13.5% before Friday.
Whoever told you you don’t lose money to theta until 3 hours from now has no clue about options.
That said, any quick drop isn’t theta related either. Theta doesn’t affect option prices. It’s just a sensitivity measure showing you what would happen if nothing else changes but time to expiry.
Lots of details about theta can be found in this [quant stack exchange](https://quant.stackexchange.com/a/74856/54838) answer.