Time decay and IV crush
See theta as daily rent that speeds up near expiry, and why an option can lose value even when the stock moves your way.
Module 11 of 26, Options: how they pay and what moves them. Lesson 5 of 6, about 16 minutes.
The takeaway
Time decay and IV crush are silent killers. A move in your favour is not enough to win if it is smaller than what the option’s price already expected.
This page is a public summary. The full lesson has the worked examples, an interactive exercise and a short quiz, and sits in the course. Lessons 1 and 2 of Module 1 are free and the rest need a pass.
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