TIME DECAY
Generally, the longer the time remaining until an option’s expiration, the higher its premium will be.This is becausethe longer an option’s lifetime, greater is the possibility thatthe underlying share price might move so as to make theoption in-the-money. All other factors affecting an option’sprice remaining the same, the time value portion of an option’s premium will decrease (or decay) with the passage of time.
Note: This time decay increases rapidly in the last several weeks of an option’s life.When an option expiresin-the-money, it is generally worth only its intrinsic value.

