Time Decay: How Options Lose Value Over Time and What to Do About It

When you buy an option, you're not just betting on price movement—you're also betting on time decay, the gradual loss of an option's value as its expiration date nears. Also known as theta, it’s the invisible force that eats away at your premium every single day, even if the stock doesn’t move. Most new traders ignore it until it’s too late. They buy cheap out-of-the-money calls or puts, hope for a big move, and then watch their investment vanish—not because the market went against them, but because time ran out.

Time decay isn’t random. It accelerates as expiration nears. In the last 30 days, an option can lose half its value just from time passing. That’s why professional traders don’t hold options to expiration unless they’re deep in the money. They exit early, locking in profit before the clock runs out. And if you’re selling options, time decay is your best friend. Sellers collect premium upfront and let time do the work. Banks, hedge funds, and market makers rely on this daily. It’s not magic—it’s math.

This isn’t just theory. Look at the posts below. You’ll find real examples of how option premium, the price paid for an option, which includes both intrinsic and time value changes under pressure. You’ll see how traders use expiration date, the fixed day when an option contract stops being valid to plan trades, not guess. And you’ll learn why some strategies, like selling covered calls or iron condors, thrive on time decay while others, like long straddles, are built to lose if held too long.

There’s no way around it: if you trade options, you must understand time decay. It’s not a side note. It’s the core of pricing. The good news? Once you see how it works, you stop fighting it—and start using it. The posts here give you the tools to do exactly that: real strategies, real data, no fluff. You’ll find out which trades work best in low-volatility markets, how to pick expiration dates that match your outlook, and why some brokers make it harder than it needs to be. This isn’t about getting rich overnight. It’s about surviving long enough to win.