At What Point in an Option's Life Is Theta Decay Typically the Fastest? ▴ Learn

At What Point in an Option’s Life Is Theta Decay Typically the Fastest?

Theta decay is typically the fastest in the final 30 to 45 days leading up to expiration, and it accelerates significantly in the last few weeks. This acceleration is most pronounced for At-the-Money (ATM) and near-the-money options.

The rapid decay reflects the quickly diminishing time for the underlying asset's price to move favorably, making the time value component drop sharply.

How Does a Deep In-the-Money Option’s Theta Compare to an At-the-Money Option?

When Is Time Decay Most Severe?

When Is Theta Decay Most Accelerated for an Option Contract?

Does an ITM Option Lose Time Value Faster or Slower than an OTM Option, All Else Equal?