In finance, theta measures the rate of change of an options price (or value) with respect to the passage of time.

It is interesting to note that theta is the only component of an options price that can not be hedged against.

For example, a trader can hedge her portfolio against delta and gamma, since these represent the first and second derivatives respectively of the function pricing the underlying instrument.

There is no instrument, however, which can hedge a porfolio of options against the passage of time.

In brain wave frequencies, theta is the frequency range where drowsiness, unconciousness, dreaming states and deep tranquility happen. Most daydreaming occurs while in the theta range. It is normally a very positive mental state.

Theta is approximately 4 to 7 cps (cycles per second). Some researchers regard theta to be 5 to 8 cps.

With practice, meditation can also lower a person's brain wave frequency to theta while allowing the meditator to remain concious.

Prolonged states of the theta brain wave frequency while concious can be extremely productive and a time of very meaningful/creative mental activity.

-back to Brain Wave Frequencies-

The"ta (?), n. [L., fr. Gr. qh^ta, the Greek letter θ,

A letter of the Greek alphabet corresponding to th in English; -- sometimes called the unlucky letter, from being used by the judges on their ballots in passing condemnation on a prisoner, it being the first letter of the Greek qa`natos, death.

Theta function Math., one of a group of functions used in developing the properties of elliptic functions.

 

© Webster 1913.