How do you calculate theta decay?

A simple average is total premium ÷ days to expiration. Example: $0.85 premium × 100 = $85 per contract over 30 DTE ≈ $2.83/day. That is a linear estimate; actual theta speeds up in the last 2–3 weeks.

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

Theta decay calculator: average daily theta ≈ premium × 100 × contracts ÷ DTE. Linear estimate—actual decay accelerates near expiration.

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