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.
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