Options Greeks
How does the Theta decay curve accelerate during the final 30 days before expiration?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Theta decay follows a non-linear curve that accelerates meaningfully inside the final 30 days before expiration, with the steepest losses in extrinsic value occurring in the last week or two.
How it works
This acceleration occurs because the probability-weighted range of outcomes narrows as time runs out, concentrating remaining time value loss into a shorter window before contract expiration.
An example
A 60-day XYZ option might lose extrinsic value slowly at first, then shed a disproportionate share of its remaining time value in just the final ten trading days.
Risk & limitations
Because of this curve, holding short-dated long options through quiet periods can be costly, as decay works against the position daily regardless of stock direction.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.