What Is the Relationship between ‘Theta’ and ‘Gamma’ in Options Pricing?

Theta (time decay) and gamma (rate of change of delta) are inversely related. High gamma options, typically those near the money and with short maturities, have the highest theta decay.

This is because the rapid change in delta (high gamma) is coupled with the highest rate of value erosion (high theta) as the option approaches its expiration. Traders often view this as a 'gamma-theta trade-off,' where one must accept rapid time decay to gain high sensitivity to price changes.