What a day costs the holder of an option and pays its writer — the rate at which time value falls away. It grows towards expiry rather than running evenly, so the last week of a contract's life carries far more of the decay than the first.
What a day costs the holder of an option and pays its writer — the rate at which time value falls away. It grows towards expiry rather than running evenly, so the last week of a contract's life carries far more of the decay than the first.