# Options trading part 6: practice bonus

You have learned in school, on television, or YouTube how to visualize atoms, protons, neutrons, electrons, etc.

This model is entirely inaccurate, yet we use it because it helps us visualize the specifics of these abstract subjects.

As delta decreases, so does the premium.

`23000 - 20630 = 2370`

# Delta PNL

Every options contract has a delta

between 0 and 1

or 0 and -1

`Current price of bitcoin: \$20630Call option expires June 24 (within 7 days)Strike price: \$23000delta: 0.24 Δtheta: -62premium: \$486Vega: 10.41`
`delta * change in price0.24 * 3507.1 = \$841.704`
`delta * absolute change in price = delta PNL0.24 * -3508 = −\$841.92`

As the underlying moves, the delta moves because of Gamma.

`strike price - current btc price (underlying)\$23000 - \$20630 = 2370`
`\$23000 (strike price) - 2370 = \$20630`
`(0.24 + 0.48) / 2 = 0.36 Δ`
`average delta Δ * price move = Gamma PNL 0.36Δ * 3507.1 = \$1262.556`
`\$23000 + 3508 = \$26507.10`
`(0.24Δ + 0.06Δ) ÷2 = 0.15Δ`
`average delta Δ * difference in move = Gamma PNL 0.15Δ * −3507.10 = -\$596.207`
`Current price of bitcoin: \$20630Call option expires June 24 (within 7 days)Strike price: \$23000delta: 0.24 Δtheta: -62premium: \$486Vega: 10.41`

In addition, the time decay accelerates as your option contracts approach “At the money” (ATM)

`-60 * 7 = −420`
`Current price of bitcoin: \$20630Call option expires June 24 (within 7 days)Strike price: \$23000delta: 0.24 Δtheta: -62premium: \$486Vega: 10.41`
`days to expiration - vol points loss10.41 * -13 = −135.33`
`Gamma PNL:  \$1262.65Time decay: -\$420Vega loss: -\$135.33----------------------Combined: \$751.65`

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