Calculation and mechanics
In Foliograph, DTE is the difference between the expiration date and the current date in calendar days. Weekends and holidays therefore count. Option models convert the remaining time into a fraction of a year. The exact time convention can differ slightly between models and platforms.
For applications spanning several time zones it must also be defined which reference date counts as "today", so that the same contract does not show different DTE values on different computers.
DTE = expiration date - today (calendar days)
Distinction
The expiration is the date, DTE the distance to it. As the remaining term shrinks, less time is left for a price move, so the time value of an option generally declines. For the IV term structure and the expected move, DTE serves as the term axis.
Related terms
- Expiration (Expiry)
- IV Term Structure (Volatility Term Structure)
- Expected Move (EM, one standard deviation move)
- Roll and Roll Efficiency (Rolling)
All market and analytical information is provided for educational and analytical purposes only and does not constitute investment advice or a trading recommendation.