how do options traders take advantage of time decay 
options traders can write options to take advantage of time value decay sellers of options collect money when they write the contract and keep the entire amount called the premium if the option expires worthless in contrast the buyer of the options loses the premium if the option expires worthless in addition to time decay when do options traders lose money any trader making a directional bet on the underlying asset by buying options can still lose money if the underlying does not move in the desired direction quickly for example a bullish trader buys a call option with a strike price of 55 when the current price is 50 the trader will make money if the stock moves above 55 minus the premium paid but it must do so before the option expires the bottom linea wasting asset such as vehicles non renewable resources and financial market options declines in value over time accountants use depreciation formulas to account for the loss of tangible assets like a work truck in the financial market traders can lose money as options move toward expiration and the investment vehicle loses value the comments opinions and analyses expressed on investopedia are for informational purposes online read our warranty and liability disclaimer for more info 