A measure of how much an option loses in value each day due to time passing, assuming nothing else changes. Options lose value as they get closer to expiration because there is less time for a profitable move to occur.
You buy a call option with a theta of -0.05 per day. If the stock price stays exactly the same, your option will lose $0.05 in value each day purely because of time decay. After 10 days with no price movement, your option is worth $0.50 less.
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