What is theta decay in options?

Theta is the rate at which an option loses value over time. As expiration approaches, time value decays. Sellers benefit from theta—they collect premium as the option loses value.

Is theta decay linear?

No. Theta decay accelerates in the final 2-3 weeks before expiration. This calculator uses a linear average (premium ÷ DTE) as a rough guide. Actual decay is curved.

Theta Decay Calculator

Linear estimate of average theta decay per day. Actual decay is non-linear (accelerates near expiration).

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