Glossary · Options

Theta

How much value an option loses each day from time passing, all else equal.

Why it matters

Buyers pay theta every day, weekends included; sellers collect it. Decay speeds up as expiration nears.

How to read it

Shown in dollars per contract per day.

Related

Days to expirationHow many calendar days remain until an option expires.Intrinsic and extrinsic valueIntrinsic is an option’s exercise value now; extrinsic is everything else, paid for time and uncertainty.

In the Cluenex app, this explanation opens next to every theta figure, with the live reading for the stock you are looking at. Open it in Cluenex