Options Theta Decay Calculator

One day is an approximation; a weekend is a scenario

This calculator uses T = calendar days / 365 and reports theta as the annual time derivative divided by 365. For an elapsed interval h, the linear estimate is theta × h. Full repricing instead calculates V(T − h/365) − V(T), holding stock price, volatility, risk-free rate and dividend yield fixed.

For the default $100 stock and $100 call strike, 30 days remaining, 20% IV, 5% continuously compounded rate and zero yield, the premium is $2.4934 and theta is −$0.044988 per share per day. One long contract with multiplier 100 has a linear one-day change of −$4.4988; repricing from 30 to 29 days gives −$4.5311.

Set elapsed days to 3 to model the same clock time on Friday and Monday. The linear estimate is −$13.4964, versus −$13.7977 from repricing at 27 days. The $0.3013 difference comes from the curved price path, even though the other inputs never moved. These are calculations, not observed market returns.

Keep the day-count convention consistent

Changing only a divisor does not convert calendar days into trading sessions. The remaining time and annualized volatility assumptions must match the model clock. A trading-day theta quote cannot be multiplied by three calendar days without first establishing its convention. The 365 divisor here follows directly from the stated year fraction: reducing time by one calendar day reduces T by 1/365.

The Options Industry Council's theta explanation notes that models account for weekends but do not share a single decay convention. A Monday quote can also reflect new information, a different IV or a changed bid/ask spread. This tool does not forecast that quote.

Position signs and the expiration curve

For the default call, switching one contract from long to short changes position theta from −$4.4988 to +$4.4988 per calendar day. The option's own theta and premium curve stay the same. Doubling contracts doubles the signed position change; it does not alter the model premium. Positive position theta does not cap losses from an adverse stock move.

With the same default inputs, call theta is about −$0.04499 at 30 days, −$0.08579 at 7 days and −$0.21567 at 1 day. This at-the-money example steepens toward expiry. Deep in-the-money or out-of-the-money options need not follow that path, and a deep in-the-money European put can even gain model value as time passes.

For example, changing only the stock to $50 and the type to put gives theta of +$0.01364. With negligible probability of finishing out of the money, its price is close to 100 × exp(−0.05 × 30/365) − 50 = $49.5899. The discounted strike grows toward $100 as time runs out, so the long put has positive theta. This is a European-model result, not an early-exercise valuation.

Check the contract before interpreting theta

1. Match the ticker, call or put, strike, expiration time, exercise style and multiplier shown by your TradingView contract view or broker. Convert the time remaining into calendar days, including fractions for intraday scenarios.
2. Use IV for that contract and record the quote timestamp. The default inputs are hypothetical. Missing IV, rate or dividend information must be supplied explicitly before treating the scenario as a contract estimate.
3. Compare the one-day approximation, the chosen elapsed period and the expiry curve. To compare theoretical Greeks under explicit model inputs, use the Option Greeks Calculator.

The model assumes European exercise, constant annualized volatility and rates, and continuous dividend yield. It omits discrete dividends, early exercise, assignment, transaction costs and market gaps. The OIC model explanation describes why American exercise needs different treatment. This calculator is educational and is not investment advice.

Sources and formulas reviewed October 21, 2026. Values are rounded after calculation.