Time Decay is your friend! Time decay is the reduction in the value of an option as the time to the expiration date approaches. Time decay is also called theta and is known as one of the options Greeks.
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A call option with a strike price of $20 while the underlying stock is trading at $20 would have no intrinsic value since there's no profit. The extrinsic value of options factors in the amount of time left before expiration and the rate of time decay leading up to the expiry. If an investor buys a call option with a few months until expiry, the option will have a greater value than one that expires in a few days. As time passes and the option isn't yet profitable, time decay accelerates, particularly in the last 30 days before expiration.
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