How Does the Time until Expiration (Time Decay) Influence the Options Bid-Ask Spread?

Options closer to expiration have higher time decay (Theta) and are generally more sensitive to small price changes in the underlying asset. This increased sensitivity and the rapidly changing risk profile cause market makers to widen the bid-ask spread for short-dated options to compensate for the higher risk of adverse price movement before they can hedge.

This wider spread directly increases the potential for slippage on those contracts.