What Is the Impact of Time Decay on Long-Term Options (LEAPS)?
Time decay (theta) has a minimal impact on long-term options (LEAPS) in the early stages of their life. Because there is a significant amount of time until expiration, the time value is very high, and the decay is slow.
As LEAPS approach the one-year mark, their theta begins to accelerate, and time decay becomes a more significant factor.
