If you are not familiar with options, I would suggest reading my first 8 posts: Part 1 - Introduction to options Part 2 - Selling Put options Part 3 - Buying Put options Part 4 - Selling Call options Part 5 - Buying Call options Part 6 - Common Issues faced when selling or buying options Part 7 - LEAPS Part 8 - Rolling Options Time Decay in Options Time decay is the decline in the value of an options contract as time passes. It accelerates as the time to expiration draws closer since there's less time to realize a profit from the trade. Time Decay is an important component in the extrinsic value of an option. Why is Time Decay important? Time decay is important because it affects the option premium. If you are a buyer of an option, you want to pay as little premium as possible for the lon