Theta (Time Decay)
Also called: time decay
How much value an option loses each day as expiration approaches.
Every option is a melting ice cube. Theta measures how fast. Time decay speeds up in the final weeks before expiration, which is exactly why option sellers tend to sell 21 to 45 days out: they collect the fastest part of the decay. For buyers, theta is the headwind you fight every day the stock sits still.
For example
A put with $0.05 of theta loses about $5 of value per contract each day, all else equal. That daily bleed is the seller’s edge.
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