As a reminder - we got in at the blue box thinking the stock price would go down to our target of $20.75. However, as soon as we got in, the market went against us and we sold an October 25 Put Option for $0.45
Since that time the price has drifted lower. This has made both the option we bought and the option we sold go up in price. So, we have our bought option helping us and our sold option hurting us.
But there is good news and that is - time has continued on and has not stopped, therefore Theta has been working FOR US in our sold option.
We sold that option for $0.45 and we can buy it back today at $0.40. So we've made a simple $0.05 even though the price has gone against us in that trade. Currently Theta is helping us by $0.04 per DAY. Not a huge amount, but if you analyze the numbers a bit this means that Theta is currently knocking off 10% of the value of the option PER DAY (weekends included) even though the price is going against us.
Thanks Theta
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