The Four That MatterHow much do I earn per day?

The value an option loses each day purely from time passing. When you sold the option, that loss is your income — it is the engine the whole wheel runs on.

Where you see it: The Theta / day figure in your journal's live-risk strip, per-position in the Assign tooltip, and on AI Trader position cards.

An option's price splits into intrinsic value (how far in the money it is) and extrinsic value (everything else — time and volatility). Theta measures how fast the extrinsic part drains as the clock runs. It is quoted per share per calendar day, so a theta of 0.05 means the contract loses about five cents of value a day, or $5 per contract.

The drain is not linear. Extrinsic value falls roughly with the square root of time remaining, so the curve steepens as expiry approaches: the last week gives up far more per day than a week six months out. That is why the diagram above bends.

For a buyer, theta is a cost — a headwind that has to be overcome by the stock moving. For a seller, it is revenue. You collected the premium up front, and every day the contract is worth less to buy back, which is money moving toward you. This is the single clearest reason the wheel is a seller's strategy.

The platform shows theta as dollars per day for the whole position: |theta| × 100 × contracts. Two contracts at 0.053 is about $10.60 a day. That is the figure to compare against, not the raw per-share decimal.

Theta is highest for at-the-money options and falls off in both directions — a deep in-the-money or far out-of-the-money contract has little extrinsic value left to lose.

Book-level theta is the sum across every live leg, and it moves for mundane reasons: it climbs as expiries approach and drops when positions are closed or roll off. A falling book theta usually means positions resolved, not that anything went wrong.

Theta per day turns an options book into something that reads like a yield. A book earning $60 a day in decay describes roughly $1,200 a month if nothing changes — and nothing ever stays unchanged, which is why the figure is a rate and not a forecast.

The relationship between theta and expiry is why tenor is a real choice. Shorter-dated contracts earn more decay per day but need replacing more often and give less room to manage; longer-dated ones earn less per day and tie up collateral longer. Both AI Trader books exist to show that trade-off side by side.

Theta and gamma pull against each other. The final days before expiry are where decay is richest and where the position is least stable — the same steep curve that pays best is the one that reprices fastest on a move.

Like everything in this guide, these are descriptions of conditions and reference levels — context for your own decisions, not instructions to trade.