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Time decay (extrinsic value decay) is an options trading concept that traders of all levels need to understand, especially beginners.
Options are sometimes referred to as “decaying assets” as their prices are observed to decrease as time passes and they approach their respective expiration dates.
While time decay may seem confusing, it actually makes complete and logical sense when it is explained clearly.
In this video, my goal is to explain the time decay of options in the most understandable way so that you can understand why option prices decrease over time.
I hope you feel more confident with your understanding of time decay after this video.
Be sure to leave a comment down below with any questions you may have!
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