Theta is a clock, and your journal can hear it ticking
Time decay is a property of the contract you held. Here is how to see it in your own hold-duration data.
An option premium contains intrinsic value and time value. Time value shrinks as expiry approaches, slowly at first and then very quickly in the final days.
That is theta. It is arithmetic, not opinion, and it happened to every position you have ever held overnight.
What the decay curve looks like
Not a straight line. The erosion accelerates into the last sessions before expiry, which is why the same option can feel lazy on Friday and vicious on Tuesday morning.
Shape of time-value erosion for an at-the-money option, all else held equal. Illustrative curve, not a quote.
Split your own book by hold duration
Group closed trades into intraday, overnight, and multi-day, separately for long and short premium. The differences in outcome are usually larger than any difference between your setups.
Calendars are not all equal
Weekends and mid-week exchange holidays change how much calendar time passes between two sessions. If your book has holiday-heavy weeks, note them, because they distort any average built on session counts.
Illustrative journal data, not a live book and not a performance claim. Decay is one of several forces here.
Key takeaways
- Time value decays faster as expiry approaches; the curve is not linear.
- Split P&L by hold duration for long and short premium separately.
- Holiday calendars distort session-based decay averages.
Where these numbers come from
Not advice, not a call. NiyataBook is a personal trading journal, not a SEBI-registered investment adviser or research analyst. Everything above looks backwards at trades that already closed. What happened in a book does not promise what happens next, and F&O can take a year’s savings in a week.