Theta (Options Greek)
Measures daily time decay - how much value an option loses each day just from the passage of time.
Formula
More Details
What is Theta?
Theta is your daily time decay. It tells you how much value an option loses each day simply from time passing, all else being equal.
Learn more: Options Greeks Guide | Greeks Analysis | Options Intraday Charts
Theta Direction
- Positive Theta: You collect time decay (net short options). Time works FOR you.
- Negative Theta: You pay time decay (net long options). Time works AGAINST you.
Theta Interpretation
A Theta of -400 dollars means your portfolio loses roughly 400 dollars per day just from time decay. You need the underlying to move enough to offset this erosion.
Theta Acceleration
Time decay is NOT linear:
* 30+ DTE: Slow decay
* 7-30 DTE: Accelerating decay
* <7 DTE: Rapid decay (especially ATM options)
Theta Strategies
| Strategy | Net Theta | Goal |
|---|---|---|
| Covered Calls | Positive | Collect premium |
| Cash-Secured Puts | Positive | Collect premium |
| Long Calls/Puts | Negative | Need big move |
| Iron Condors | Positive | Profit from no movement |
TradesViz Net Theta
The Options Command Center shows your Net Theta across all positions. If negative, you know exactly how much time is costing you daily.
Where to find it in TradesViz
Example
An option with -0.05 Theta loses 5 dollars per day (per contract) from time decay.