Premium Decay - Approx Daily Cost

Risk disclaimer

Linear intuition only; real decay varies with time and volatility.

Real Theta is non-linear: decay accelerates near expiry and slows for long-dated at-the-money options.

This page uses premium ÷ days as a linear intuition estimate for a quick directional feel.

Premium 300 with 30 days → daily ≈ 10, weekly ≈ 70.

Real decay accelerates near expiry, so the linear figure is conservative.

Do sellers earn this daily?

Theoretically as an approximation — but volatility and direction move the price; it is not a steady income.

Pair with the options-theta and option time value calculators.

Price European call and put options with the Black-Scholes model from spot, strike, time to expiry, volatility and risk-free rate.

Estimate the delta of European call/put options with Black-Scholes — the change in option price per 1 unit move in spot.

Estimate the gamma of European options with Black-Scholes — how fast delta changes as spot moves.

Estimate the vega of European options with Black-Scholes — price change per 1% increase in implied volatility.

Estimate the daily time decay (theta) of European options with Black-Scholes to understand the cost of holding.

Find the expiry break-even price of a single call or put from strike and premium, for both buyers and sellers.

Category: Options