Yes, the time value in the option decreases during intraday, one of the reasons why option writing/shorting is considered a better intraday strategy than buying options, especially when the market volatility is low.
Nithin, one more question, will time value decay if between the end of trading day and the open of next day? assuming all other factors and underylying index or same
Yes, Arun. In sideways market with low volatility, I have seen there is a gap down between today’s closing and tomorrow’s opening price, in nifty options sometimes close to 10 points too.
Option buyers are borne to this inherent risk of time erosion,