Option Premium & Theta Decay

An option's price = intrinsic value + time value. Time value melts every day — that melting is theta.

Every day that passes, an option loses a little value — even if the stock doesn't move. That's why 'waiting' costs buyers money.

💡 An option is an ice cream on a hot day: even if nothing else changes, it melts. Near expiry it melts fastest.

• Time value → 0 at expiry; only intrinsic remains.
• Decay accelerates near expiry.
• Try the Theta calculator in Tools to see it in numbers.

🧠 Options are melting ice cream — buyers race the sun. ☀️🍦