θ Option Theta Decay

How option premiums erode over time — interactive Black-Scholes model

Option Price vs Days to Expiration

As a seller, the declining curve is money flowing into your pocket

Total Price
Time Value
Intrinsic Value

Daily Theta Decay ($ per contract)

The final 30 days is where sellers earn the most per day (×100 shares)

Daily Theta (per contract)

Key Takeaways for Option Sellers

THE SWEET SPOT
Sell options with 30–45 DTE. Theta accelerates dramatically in the final month.
TIME VALUE = YOUR INCOME
The green dashed line is what you're selling. It decays to zero at expiration regardless of stock movement.
BUY BACK AT 50–80% PROFIT
Don't hold to expiry. Close early and redeploy. Avoids gamma risk in the final days.
IV AMPLIFIES EVERYTHING
Slide IV up to 100%+. The curve steepens and premiums fatten. High IV = expensive insurance to sell.