Lesson 6 of 17Beginner6 min
What is theta decay in crypto options?
Theta decay is the fall in an option's price as time passes, with everything else unchanged. Part of every option's price is time value: the chance the price still moves before expiry. Each day some of that chance is gone. Buyers lose it; sellers earn it. On Bitcoin it runs around the clock, weekends included.
Real Delta Exchange quotes · 24 Sep, 9:09 am ISTFree, no account needed
Value melts as the deadline comes
Part of an option's price is time value: the chance that the price still moves before expiry. Each day, some of that chance is gone.
Drag the days slider from today towards expiry with the price unchanged. The buyer's value melts. The seller's grows.
Think of it like this. Like a train ticket for next week. Today it can still be useful in many ways. On the day of the journey, it is only worth the journey itself.
Profit or loss if the price is 83,956(today's price)
| Date | Profit / loss |
|---|---|
| On target dateThu, 24 Sept | −0.02loss |
| On expiry dateFri, 2 Oct | −14.9loss |
Move over the graph to read any price; tap or click to set it as the target.
The price has not moved. You start 0.02 down: the gap between the price you dealt at and the market's mid price. That is the cost of entering, and time decay earns it back.
The price does not move all week. Who is happy on Friday?
Answer the quick check to finish. Your progress stays in this browser.
Next: Volatility: calm market, wild marketKey terms
- Theta
- The money an option loses per day from time alone.
- Time value
- The part of the premium beyond intrinsic value.
- Time decay
- The fall of time value as expiry comes closer.
- DTE
- Days to expiry.
Questions people ask
When is theta decay fastest on Bitcoin options?
For an at-the-money option, in the last day before expiry: the dollar decay speeds up every hour. An option far out of the money decays most a few days out, then has little left to lose.
Is theta good or bad?
It is a cost for option buyers and income for option sellers. A short strangle, for example, earns theta every day Bitcoin stays between its strikes.
How is theta shown on Delta Exchange?
Delta publishes theta for every option as the dollar loss per day for one Bitcoin of options. For ten lots, 0.01 BTC, divide it by one hundred.
Why the same option is cheaper on Thursday
Take a weekly Bitcoin option that expires on Friday. On Monday it has four days for the price to move; on Thursday it has one. With Bitcoin unchanged, Thursday's option is cheaper, because there is less time left for anything to happen.
Theta never sleeps in crypto
Stock options pause for nights and weekends. Crypto options do not: Bitcoin trades every hour, and time value keeps melting through Saturday and Sunday. For sellers that is income every day; for buyers, holding a position over a weekend costs real money.
Theta and gamma come together
Fast decay near expiry comes with high gamma: an at-the-money option's value swings hard on small Bitcoin moves. Sellers earn the decay but carry that swing, so a stop matters most on expiry day.
Written by the Algoclear team · Updated 22 September 2026 · Examples use Bitcoin options on Delta Exchange India.
Practise it on real prices.
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