ASASBW - Standard Bank please explain

[Rovert]

I dont get it, this morning the weekly decay on this warrant was 5% ...now this afternoon it is 4.22%? How does this work, can someone at SBK please explain?

[SimonPB]

becasue time decay changes and we update daily ..

[Rovert]

Yes i understand that but surely decay increases relative to the days to expiry ; not the other way around ? If i took a snapshot of the buy/sell at 10am this morning and compare it to now ; with the same underlying share price; there is a 1c difference...something doesnt add up

[SimonPB]

tiem decay is a factor of tiem value and days until expiry, but it is also not linear, so get higher as expirey nears .. snap shoot, I don;t understand how time decay figures in that comment, theta is an over night issue ..

[Rovert]

Ok so are you saying that it is possible that time decay can be 5% this week and 2% next week ? ; you are saying it is possible that time decay can rise and fall as we approach days to expiry ? What i was trying to get to with the snapshot is that i recall sellers at 19c this morning when the underlying was R120.50 ...Sellers are now 20c? But this time decay issue is important...it affects decisions as to how long its viable to hold. In this case, time decay went Down....is that possible?

[SimonPB]

time decay can change from day to day ..an with a warrant closish to expiry and some what out the money .. it will be more volaytile .. and tiem decay can go up or down .. and it has not effect intra-day, only over night ..