As we have already seen, all trades have an associated time frame, and in this equity options market, it is referred to as the Expiration Date. This is when your option contract will expire and it will either become worthless or if you might assigned in a stock, which could be potentially harmful. So always keep track of when your Position is going to expire. Weekly options expire on Fridays and monthly options expire on the third Friday of every month.
Option premiums decay the most 1-15 days prior to Expiration, due to Theta decay acceleration. Usually a short option will have a higher Theta meaning faster decay as you get close to the Expiration Date.
Option prices are highly correlated to the stock prices as you get closer to the Expiration Date, especially in-the-money options. So, the week prior to expiration, you will have very high Gamma and your ITM or near-the-money option will start to move very quickly. Since you do not have a lot of option premium, your Theta will increase and hence there will be decay in the option prices, leading to a higher Gamma and increased movement of the option. This shows that options move the same way as stocks.
Rule of thumb
Close your option position 5-20 days prior to Expiration. Also close the position once the Target Gain or Loss is reached, of if the stock goes against you or when the Tradespoon prediction changes. And always close the position once the stock moves 3-5% in your direction.
Risk denoted by High Gamma indicates that options will move the same way as stocks as you get closer to the Expiration Date. For shorter options this is great as there is a higher time decay indicating a higher Theta. But for long option, this is not good as the premium will decay erratically as we near expiration.