Theta (the Greek letter Θ) is a measure of the rate of change of the value of a derivative or portfolio with time. Mathematically:
Θ= (∂P)/(∂t)
where P is the price of a security and
t is time.
The price of most options tends to decay with time. This is because option value increases with time till expiry. So, as time passes, both option value and theta decline.