Time decay

Discussion in 'Financial Terms' started by raulv04, Jan 30, 2013.

  1. raulv04 Member

    San Luis Potosi, Mexico
    Mexican Spanish
    I'm translating a glossary to be used in a future financial translation, and, unfortunately, I don't have the context for the phrase "time decay". However, I do have a definition I found at Investopedia.com that reads:

    "The ratio of the change in an option's price to the decrease in time to expiration. Since options are wasting assets, their value declines over time. As an option approaches its expiry date without being in the money, its time value declines because the probability of that option being profitable (in the money) is reduced.

    Also known as "theta" and "time-value decay"."

    A further explanation:

    [h=2]Investopedia explains 'Time Decay'[/h]"Time decay of an option begins to accelerate in the last 60 to 30 days before expiry, provided the option is not in the money. But in the case of options that are deep in the money, time value decays more rapidly. The market finds these options too expensive compared to other strike prices or futures. As such, the holders of deep-in-the-money options nearing expiry discount the time value to attract buyers and in turn realize the intrinsic value.

    The greater the certainty about an option's expiry value, the lower the time value. Conversely, the greater the uncertainty about an option's expiry value, the greater the time value."

    I need to translate this term in Spanish, but so far, I haven't found anything. My best guess was "depreciación con el tiempo", but I'm not fully convinced. Any ideas will be welcome. Thanks!
  2. limpiezayesplendor Member

    Spanish - Spain
    Hola raulv04,

    Yo diría "depreciación del valor temporal", aunque en la wikipedia hablan de "sensibilidad al paso del tiempo", que aunque no significa lo mismo, también me suena bien.

    Link en la wiki: http://es.wikipedia.org/wiki/Griegas_(finanzas)

    Un saludo,


Share This Page