Premium vs Theta

The upfront price paid by the option buyer to the option seller for the rights conveyed by the contract; the premium is the buyer's maximum possible loss if the option expires worthless; composed of intrinsic value and extrinsic (time) value.

The rate of change of an option's price relative to the passage of one day, all else equal; always negative for bought options (time decay reduces value); always positive for sold options; accelerates as expiry approaches; measured in dollars lost per day from time decay.