Theta Decay Calculator

Plug in a stock price, strike, IV, and DTE. The calculator draws a Black-Scholes decay curve — the theoretical option value at every day from entry to expiration. The shaded zone highlights the last 30 days where decay really accelerates.

Below the chart, the milestone table shows daily theta at 60, 45, 30, 21, 14, and 7 DTE. Play with it. Crank up IV and watch the total time value jump. Move the strike further OTM and see the option approach zero faster. Change your entry DTE and notice how it shifts your daily income rate.

The number you care about most is daily theta at your entry DTE. That's your theoretical daily profit from time decay alone. Multiply it by your contract count and you've got your position's daily theta income.

Pull this up whenever you're making a timing decision:

• Picking your entry DTE: Compare daily theta at 45 vs. 30 vs. 21 DTE for the same strike. I almost always land in the 30-45 window. Best balance of total premium and daily decay rate.
• Deciding when to close early: You're at 21 DTE and you've captured 55% of the premium. But now daily theta is much higher. Is it worth closing and redeploying? This chart shows you exactly how much time value is left.
• High IV vs. low IV: Enter the same stock at 25% IV and then at 45% IV. The difference in total time value is massive. High IV environments are when option sellers feast.
• Seeing why the last 30 days matter: The curve speaks for itself. Decay isn't linear — it's a hockey stick. Selling at 30-45 DTE puts you right at the top of the steep part.

Theta is how much an option's price drops every day just from time passing. It's one of the "Greeks" — but it's the only one that consistently puts money in your pocket as an option seller. Every day that ticks by, the option you sold loses value. That lost value? It's yours to keep.

Time Value vs. Intrinsic Value

An option's price has two parts: intrinsic value (how far in-the-money it is) and time value (what the market pays for the possibility of future movement). Theta only eats time value — intrinsic value doesn't care about time. This is why ATM options decay the fastest in dollar terms. They're 100% time value with nothing else propping them up.

Why the Last 30 Days Matter Most

Theta decay isn't linear. It's a curve that gets dramatically steeper near expiration. Here's the math: an option with 60 days left has only about 41% more time value than one with 30 days left (√60 / √30 ≈ 1.41), even though it has double the time. About a third of all time value vanishes in the final two weeks. That's the hockey stick.

This is why I target 30-45 DTE when selling options in the wheel strategy. You're positioned right where the curve steepens, but you've still got room to adjust if the trade moves against you.

How to Use This Visualizer

Plug in a stock price, strike, IV, and expiration. The chart draws a Black-Scholes decay curve — option value at every day from entry to expiration. The shaded green zone marks the last 30 days where decay accelerates. The milestone table below shows daily theta at key DTE points so you can see the acceleration in real numbers.

Try cranking up IV — watch the curve shift upward. More volatility means more time value, which means more total decay. Move the strike further OTM and notice how the option approaches zero faster. Less intrinsic value cushion means time value is all there is to lose.