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Greeks
Theta vs Vega: Time Decay vs Volatility
Theta and vega are the two Greeks that price time and fear. On 0DTE, one of them rules and the other basically vanishes.
NoVo Options Trading · 2026
Theta measures how much an option loses to time decay each day; vega measures how much it moves per point of implied volatility. Here’s the difference — and why theta dominates 0DTE while vega barely matters.
Theta: the time decay
Theta is the daily erosion of an option’s time value — it works against option buyers and for sellers. It accelerates as expiration nears, so on 0DTE it’s ferocious: an ATM option can lose a big chunk of value in a single quiet lunch hour. Theta is a constant drag you’re racing when you buy 0DTE.
Vega: the volatility sensitivity
Vega is how much an option’s price changes per point of IV. High vega means volatility swings move your option a lot. It’s large for longer-dated options and tiny for 0DTE (little time left for vol to matter — that’s veta). So the IV crush that devastates monthlies barely touches a 0DTE option.
Theta bills you for time; vega prices your exposure to fear. On 0DTE, theta is a wrecking ball and vega is a whisper.
Why it matters on 0DTE
On 0DTE, your P&L is dominated by delta/gamma (direction) and theta (decay) — vega is negligible. So you trade direction against the clock, not volatility. That’s why 0DTE is a pure direction-and-time game. Respect theta; ignore vega.
More on this: Weekend Theta: Why Holding Options Friday to Monday Quietly Costs You
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.