"Theta measures the rate at which an option loses value over time. It represents the amount by which the option's value decreases every day due to the passage of time, assuming all other factors remain unchanged. Theta is highest for at-the-money options and decreases as the options move in-the-money or out-of-the-money. For instance, if the theta of a call option is -0.05, it means the option's value will decrease by $0.05 per day due to time decay."