Theta Positive Position
Definition
An options position that benefits from the passage of time as extrinsic value decays. Short options and strategies like covered calls, iron condors, and credit spreads are typically theta positive.
Example
Short options positions are typically theta positive — every day that passes, the position gains value as extrinsic time decay erodes the sold premium.
Related Terms
Frequently Asked Question
What is a Theta Positive Position?
A Theta Positive Position gains value as time passes because it is net short extrinsic value. Premium sellers use theta-positive strategies to profit from time decay.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.