Glossary

Theta (Θ)

By Rohan Fernandes, Founder · Updated 2026-08-21 · Educational reference, not investment advice

Theta is the option price change per calendar day of time passing, negative for owned options and collected by short ones. Decay accelerates into expiration and is steepest for at-the-money strikes.

Theta and gamma are two faces of the same trade: the decay a short position collects is compensation for the gamma it owes. That is why "more theta" is never free; the shortest expirations pay the most per day and carry the most breach risk per move. The practical harvest window for credit structures, roughly 21-45 days to expiration, is where the theta-to-gamma exchange rate is most favorable, covered in expiration selection.

Educational reference. Options Scanner is a software tool. It is not a broker-dealer, an investment adviser, or a fiduciary, and nothing on this page is investment advice or a recommendation to buy or sell any security. Options involve risk and are not suitable for every investor; read the Characteristics and Risks of Standardized Options before trading. Examples use hypothetical numbers for illustration only.