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Does Accelerated Decay Affect ITM and OTM Options Equally?

Decay affects time value for both, but OTM options are more sensitive as they lack intrinsic value.
Greeks.Live22.11.25

Does Accelerated Decay Affect ITM and OTM Options Equally?

Accelerated decay affects the time value component of both ITM and OTM options. However, since OTM options are entirely time value, the decay represents a larger percentage loss of their total premium.

ITM options have a stable intrinsic value, which dampens the percentage effect of the decay.

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