Analysis
Credit spreads are negative vega since, if the price of the underlying doesn't change, the trader will tend to make money as volatility goes down. They are also positive theta in that, broadly speaking if the price of the underlying doesn't move past the short strike, the trader will tend to make money just by the passage of time.
Read more about this topic: Credit Spread (options)
Famous quotes containing the word analysis:
“Whatever else American thinkers do, they psychologize, often brilliantly. The trouble is that psychology only takes us so far. The new interest in families has its merits, but it will have done us all a disservice if it turns us away from public issues to private matters. A vision of things that has no room for the inner life is bankrupt, but a psychology without social analysis or politics is both powerless and very lonely.”
—Joseph Featherstone (20th century)
“Ask anyone committed to Marxist analysis how many angels on the head of a pin, and you will be asked in return to never mind the angels, tell me who controls the production of pins.”
—Joan Didion (b. 1934)