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How Does IV Affect the Theta Decay of a Call Option?

High IV slows Theta decay because the option has more extrinsic value to lose over time.
Greeks.Live31.10.25

How Does IV Affect the Theta Decay of a Call Option?

High Implied Volatility (IV) generally slows down the Theta (time) decay of a call option. This is because higher IV inflates the extrinsic value of the option, and that value has more to lose over time.

Conversely, low IV means less extrinsic value, and Theta decay may seem more rapid in percentage terms.

What Is “Time Decay” (Theta) and How Does It Benefit the Call Seller?
What Role Does Theta Play in the Decay of an Option’s Extrinsic Value?
How Does an Options contract’S’extrinsic Value’ Decay over Time?
What Is the Relationship between Theta and Gamma near Expiration?

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