Homonym: Theta (Symbol)
Theta is a letter in the Greek alphabet, often used in mathematics and science to represent various concepts. In trigonometry, it commonly denotes an angle in a triangle. In statistics, it can represent a parameter in a distribution or a variable in a function.
In finance, Theta refers to the rate of decline in the value of an option as it approaches its expiration date. This concept is crucial for traders, as it helps them understand how time affects the pricing of options. A higher Theta indicates a faster decrease in value over time.