Does Theta Decay Over Weekends?
Yes—option pricing models account for weekends, even while a market is closed. Theta estimates the effect of passing time with other inputs held fixed; it is not a scheduled deduction from a quoted price. The Options Industry Council (OIC) explains that models include weekends but do not all distribute the decay in the same way.
Why a weekend price can look unchanged
A price labeled Last records an earlier trade, not a fresh theoretical valuation. Fidelity’s last-price definitions make that distinction. With no new eligible trade, Friday’s price can remain on screen throughout the weekend. That unchanged observation does not show that the option’s modeled value has stayed constant.
When trading resumes, the bid, ask and quoted size help you assess a possible execution; neither the last trade nor the midpoint guarantees a fill. For a field labeled Mark, check how the platform calculates it. The OIC’s bid–ask guide explains execution considerations, and Options Chains and Quotes explains the display fields.
The closed-weekend example below concerns standard U.S. equity options. Not all options share those hours: Cboe Global Trading Hours include Sunday-evening sessions for selected index options.
Repricing a call from Friday to Monday
To isolate time, hold the stock price and implied volatility (IV) fixed and reprice the same call as expiration gets closer. Consider one purchased standard 100-share call with a $100 strike, with the stock at $100 and expiration on Friday, October 9, 2026—the Friday after the modeled weekend. Assume 25% annualized IV, a hypothetical 4% continuously compounded annual interest rate and no dividends. Trading costs, financing charges and taxes are excluded throughout the example.
The calculator models American option legs; under these assumptions, this call has the European Black–Scholes–Merton value. The methodology uses remaining whole calendar days divided by 365.25 for pricing, and a 365-day divisor for reporting daily theta.
| Date (2026) | Calendar days remaining | Model value per share | Model value: one 100-share contract | Daily theta per share |
|---|---|---|---|---|
| Friday, October 2 | 7 | $1.418771 | $141.88 | -$0.104110 |
| Saturday, October 3 | 6 | $1.310931 | $131.09 | -$0.112022 |
| Sunday, October 4 | 5 | $1.194131 | $119.41 | -$0.122201 |
| Monday, October 5 | 4 | $1.065508 | $106.55 | -$0.135990 |
These are whole-date snapshots, not Friday-close/Monday-open timestamps; the actual session gap is not exactly 72 hours. Saturday and Sunday rows are theoretical values, not trades or executable quotes. All example changes use full-precision values before rounding.
The modeled Friday-to-Monday change is -$35.33 for one purchased contract. Three times Friday’s theta, scaled by 100 shares, estimates -$31.23 instead and understates the loss by about $4.09. The call’s theta becomes more negative as expiration approaches; a starting theta is a local estimate, not a fixed daily amount.
When the stock price or IV changes
Now allow Monday’s stock price or IV to differ, leaving the other assumptions unchanged. Each row below is separately repriced and compared with the same saved Friday model value, rather than with a new entry premium.
| Monday stock price | Monday IV | Monday model value: one contract | Change from Friday: one contract |
|---|---|---|---|
| $100 | 25% | $106.55 | -$35.33 |
| $100 | 20% | $85.69 | -$56.19 |
| $100 | 35% | $148.28 | +$6.40 |
| $101 | 25% | $165.22 | +$23.34 |
At 20% IV, the call loses more value than in the time-only case. At 35% IV it gains value despite the shorter remaining life. The $101 stock-price row shows another way the time effect can be outweighed. These results follow the separate effects of volatility and stock price; How Options Are Priced explains how the inputs work together.
The weekend is also known in advance. In its June 2026 discussion of long-weekend theta, the OIC notes that expected decay may already be reflected in the final trading session. That means the calendar-time result is not a promised Monday price gap or an automatic selling advantage on Friday.
Comparing dates in the calculator
To explore a fixed-input weekend, compare Position values with Analysis date set to Friday and then Monday, using the same stock-price point on the stock-price graph. Position shows the signed option value itself; Profit / loss subtracts the signed model opening value calculated for today, not the table’s Friday value. Analysis date changes that graph, while the entry premiums and summary Greeks remain based on today’s date. The table’s theta readings are separate date-specific calculations.
Editing IV, Entry price or contract quantity recomputes the opening baseline. The alternative-IV rows therefore compare separate snapshots against a saved Friday value, not the calculator’s recalculated Profit / loss curve. The calculator has no live quotes or fixed actual-fill input. Past analysis dates cannot be selected; after these dates pass, choose a later Friday/Monday pair and later expiration. Different remaining times produce different values. The methodology explains these baseline and date conventions.
References
- Options Industry Council: Theta
- Fidelity: NetBenefits Help Glossary L — Last Price and Last Trade
- Options Industry Council: Understanding the Bid and Ask Prices for Options
- Cboe: Global Trading Hours
- Options Industry Council: Options Pricing
- Options Industry Council: June Office Hours FAQs: IV Statistics, Position Management, and the Wheel Strategy