How Does Theta (Time Decay) Affect an Option's Value? ⎊ Path

How Does Theta (Time Decay) Affect an Option’s Value?

Theta is the measure of an option's time decay, representing the amount by which an option's price is expected to decrease each day as it approaches expiration. As time passes, the probability of the option becoming profitable diminishes.

This decay accelerates significantly in the final weeks before expiration, negatively affecting the option buyer.

How Does the Time Decay (‘theta’) Affect Option Prices?

How Does Theta Affect the Value of an Option as Expiration Approaches?

Does the Risk of Early Assignment Increase or Decrease as the Option Approaches Expiration?

Define the Terms ‘Intrinsic Value’ and ‘Time Value’ for an Option Contract

How Does the “Time Decay” (Theta) Affect the Value of an Option?

How Does a Market Maker Use the Theta Greek to Estimate the Daily Decay of an Option’s Value?

In Options Trading, How Does the Concept of “Time Decay” (Theta) Affect the Value of a Derivative?

How Does the Time Value of an Option Decay, and What Is the Relevant Greek?