The Ticking Clock
Theta measures "time decay"—the amount an option's value decreases every single day as it gets closer to expiration.
Options are "wasting assets." Every day that passes, the "time value" of an option leaks out. If you are the buyer, this is a daily cost. If you are the seller, this is your daily paycheck.
Many traders believe Theta stops over the weekend. In reality, it is usually priced in by the market makers on Friday afternoon. Don't expect a "free" decay jump on Monday morning!
Theta decay accelerates significantly as you get closer to expiration. Income traders often target the 30-45 day window. This is where you get a high rate of decay without the extreme price swings (Gamma risk) of the final week.
When Theta has done its job and your short option has lost 50-75% of its value, you have a choice: Close (take your profit and remove all risk) or Roll (buy back your current option and sell a new one further out in time). Only roll if the original thesis for the trade is still valid.
Look for "Theta/Vega Efficiency." If you sell an option when Implied Volatility (Vega) is high, and then that volatility drops, the combined effect of Theta decay and Volatility crush can make a trade profitable much faster than time alone.
When your short option reaches 50% profit, consider closing the position. You've captured half the premium in potentially less than half the time, freeing up capital for new opportunities.