What Are the ‘Greeks’ in Options Trading and Which One Measures Time Decay?

The 'Greeks' are a set of risk management metrics used to measure the sensitivity of an option's price to changes in various factors. The main Greeks are Delta, Gamma, Theta, Vega, and Rho.

Theta is the Greek that measures time decay, quantifying how much the option's price will decrease as one day passes, all else being equal. Theta is always a negative value for long option positions, reflecting the continuous loss of extrinsic value as the expiration date approaches.