An important notion in options strategies is time decay. As the option approaches expiration, it decays at a very rapid pace. This means that options nearing expiration experience their time value as...

An important notion in options strategies is time decay. As the option approaches expiration, it decays at a very rapid pace. This means that options nearing expiration experience their time value as moving exponentially, suggesting that more money is lost if the direction of the market is not the one that places the option in the money.