Web site such as this one here state that futures contracts do not experience time decay. I fail to see why futures do not experience time decay.
The way I see it (perhaps incorrectly) is like this: If the price of widgets is $100/Bb and I buy a futures contract for delivery in one year, I will have to pay $100 for one bushel of widgets in one year (provided that I don't sell the contract first). If the price of widgets goes down to $20/Bb and seems to stay there, my futures contract is way out of the money. It becomes a mostly unwanted contract as the delivery date nears. Anyone purchasing my contract will have to pay $100 for the bushel to be delivered when they could just turn around and buy it for $20 as spot. This is time decay if I understand it. Where have I gone wrong in my understanding?