DEFINITION of 'Theta'
A measure of the rate of decline in the value of an option due to the passage of time. Theta can also be referred to as the time decay on the value of an option. If everything is held constant, then the option will lose value as time moves closer to the maturity of the option.
Theta is part of the group of measures known as the "Greeks" (other measures include delta, gamma and vega) which are used in options pricing.
INVESTOPEDIA EXPLAINS 'Theta'
For example, if the strike price of an option is $1,150 and theta is 53.80, then in theory the value of the option will drop $53.80 per day.
The measure of theta quantifies the risk that time imposes on options as options are only exercisable for a certain period of time. Time has importance for option traders on a conceptual level more than a practical one, so theta is not often used by traders in formulating the value of an option.
Theta is the 8th letter in the Greek alphabet.

Zomma
An options greek used to measure the change in gamma in relation ... 
Charm
The rate at which the delta of an option or warrant will change ... 
Lambda
The ratio of the percentage change in an option contract's price ... 
Gamma
The rate of change for delta with respect to the underlying asset's ... 
Vega
The measurement of an option's sensitivity to changes in the ... 
Greeks
Dimensions of risk involved in taking a position in an option ...

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