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Try to read Prt2 and Prt3, It seems that Dowd was right after all, he was referring to Artzner I think. Well, I was confounded by two not unrelated queries here, If Positive Homogeneity states that p(n*X)=n*p(X), then there was a problem with Subadditivity as well p(X+X)<=p(X)+p(X), that was...

Ah Yes, I get it, you were meaning the reduction in time as the maturity of the option approaches, bringing it closer to K, yes that's what I have meant in the BSM model. However, the risk-less portfolio that you have taken explains one side of the coin, what will you do when you are long...

The portfolio you are talking about is a risk-less portfolio, why did you take that specifically? and again, the PV of K decreases with the passage of time ( Ke^-rt ; as t increases Ke^-rt will fall ). I am assuming that you are taking two separate issues, the above formula is for valuing a risk...

I don't know if this suffices as 'intuitive' but since no one has replied I am telling you my understanding. As you know Theta is a measure of the change in the value of the option portfolio with the passage of time, for in the money put, the passage of time makes it all the more valuable as...