How the calculator works.
ThetaCalculator.com uses a practical, transparent estimate of time decay. It is intentionally simpler than a full options pricing model.
Core calculation
The calculator starts with a current option price and applies the entered daily theta value over the selected holding period.
| Input | Meaning |
|---|---|
| Option price | Current option value per share. |
| Daily theta | Estimated daily change in option value from time decay. |
| Days held | Projection period. |
| Contracts | Number of option contracts. |
| Multiplier | Contract multiplier, usually 100 for standard U.S. equity options. |
Simplified formula
Estimated option price after N days
Current option price + cumulative daily theta
Estimated position value
Estimated option price × contract multiplier × number of contracts
What this methodology does well
Clear
It shows the directional effect of theta without hiding assumptions inside a complex model.
Practical
It uses values a trader can often find directly in an options chain.
Transparent
Every major input is visible and adjustable.
Limitations
The calculator does not account for underlying price movement, gamma, vega, implied volatility changes, interest rates, dividends, assignment risk, exercise style, bid-ask spreads, liquidity, transaction costs, or tax effects.
It should be treated as a theta exposure tool, not as a complete option valuation engine.