Question regarding options?

Question

You own an option. Assume the price of the underlying as well as interest rates do not move day over day. How would you expect the option value to change?

a. Increase

b. Decrease

c. No Change

Answer 1

b. Decrease

Time decay (theta) would reduce the value of the option. It is possible an increase in implied volatility would increase the value of the option, but that would not be the most common result.

Answer 2

b. Decrease.

The option has a time value, the less time left before it expires as worthless, the less the value of the option.