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The daily dollar amount an option loses from time decay, all else equal. A theta of -$0.05 means the option loses $5 per contract per day. Premium sellers profit from theta.
⚡ KEY TAKEAWAY: Your daily paycheck as a premium seller. The closer to expiration, the faster it accrues — but gamma rises too, so don't get greedy.
Delta
Sell at 0.15–0.30 delta for 70–85% probability of profit. Lower delta = safer but less premium.
Gamma
High gamma near expiration = your delta shifts fast on any move. Close or roll by 21 DTE to stay ahead of gamma risk.
Theta Decay
Theta accelerates after 21 DTE. Sell at 30–45 DTE, manage at 21 DTE to capture the steepest decay curve.
Vega
Sell when vega is high (elevated IV) so you profit from both theta decay AND the eventual IV drop. Double tailwind.