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Daily Time Decay
For the financial software you are using, is the theta equal to1) P(t+1) - P(t), everything else remains unchanged OR2) dP/dtFor me, it seems 1) is more helpful but 2) seems to be more correctAnd if you are using the system, do you prefer 1) or 2)?And a really really dumb question.. for a simple B-S model, how do you get the daily theta? just divide the theta by number of days in a year?
Daily Time Decay
Thanks! I would think 2) is the correct definition.. but for a trading software, 1) is more useful... but how would you call this? Still theta? or time decay?
