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Option Theta is defined as the change in the
price of an option for a 1-day decrease in the time remaining
to expiration.
At-the-money options have the greatest time value and the
greatest rate of time decay (option theta). The further an
option goes in-the-money or out-of-the-money, the smaller
is theta.
Theta Option and Time to expiration
As time passes, the theta of at-the-money options increases, the theta of deep in-the-money and out-of-the-money options decreases.
Theta Option and Volatility
As volatility falls, time value declines, option theta declines.
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