Final answer:
As an option approaches expiration and is at the money, Vega decreases because there's less time for volatility to affect the price, while Theta increases, indicating a faster rate of time decay.
Step-by-step explanation:
When an option is approaching expiration and being at the money (ATM), two of the Greeks, Vega and Theta, undergo changes. Vega, which measures the option's sensitivity to changes in the volatility of the underlying asset, tends to decrease as the option approaches expiration. This occurs because there's less time for volatility to affect the option's price. Theta, on the other hand, measures the rate of time decay of the option's price. As expiration approaches, Theta typically increases for ATM options, indicating that the option's value is declining at a faster rate due to the passage of time.