Options

Theta

The rate at which an option loses value purely from the passage of time. It is not linear — the final week behaves nothing like the first.

Where this comes up

Lessons that use the term in context, which is usually more useful than the definition on its own.

Theta and the shape of decay — Why the last week behaves nothing like the first.
Vertical spreads — Capping both ends on purpose, and what it costs.