Theta(Θ)
Theta measures how much an option's premium erodes each day purely from the passage of time — the cost of holding, and the income of selling.
Θ = ∂(Option Price) / ∂(Time) — usually quoted as ₹ lost per dayWhat Theta Means
Theta is the time-decay Greek. It measures how much an option loses in value with each passing day, holding everything else constant. A Nifty option with a Theta of -8 loses about ₹8 of premium per day. Theta is negative for option buyers (they pay it) and positive for option sellers (they collect it).
Time value is the only part of an option that decays — intrinsic value does not. So at-the-money options, which are almost pure time value, carry the largest Theta.
Why Theta Accelerates
Theta is not linear. Decay accelerates as expiry approaches, following a curve that steepens sharply in the final days. An option might shed a few rupees per day three weeks out, then dozens of rupees per day in the last two sessions. This is why "selling Theta" is most aggressive close to expiry.
Theta in the Indian Market
With NSE weekly Thursday expiries, Nifty and BankNifty options live and die in days, so Theta is the dominant edge for sellers. A short straddle or iron condor opened on Tuesday harvests two days of steep decay into Thursday's close. The risk is that high Gamma near expiry can wipe out a week of Theta in a single move. Quintal Mind streams live Theta per strike so you can size short-premium positions against the decay you are actually collecting.
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