Premium

Premium is the only thing a long option position risks and the only thing a short option position collects upfront. It's made of two components: intrinsic value (what the option would be worth if exercised right now) and time value (everything else — the market's estimate of how much that intrinsic value could still change before expiry).

Time value decays toward zero as expiry approaches (see Theta), which is why the same strike's premium falls through the week even if spot hasn't moved.

Example: a NIFTY 25,000 call trading at ₹180 with spot exactly at 25,000 is entirely time value, since the strike carries zero intrinsic value at the money. Two sessions later, with spot unchanged, that same call might trade closer to ₹120 — nothing about the market's view has to have changed for that ₹60 to disappear, only the calendar.