when time decay is slow investors can sell the option while it still has value 
time decay s impact on an option s premium helps investors determine whether it s worth pursuing time decay accelerates as an option s time to expiration draws closer measuring the rate of change in time decay of an option can be difficult time decay occurs regardless of whether the underlying asset s price has risen or fallen example of time decayan investor is looking to buy a call option with a strike price of 20 and a premium of 2 per contract the investor expects the stock to be at 22 or higher at expiration in two months however a contract with the same strike of 20 that s has only a week left until expiration has a premium of 50 cents per contract the contract costs far less than the 2 contract since it s unlikely the stock will move higher by 10 or more in a few days in other words the extrinsic value of the second option is lower than the first option with two months left until expiration 