What you see vs. what you get: The options risk curve

You are sitting there admiring your freshly-executed, income-generating options strategy.  What a beautiful risk curve.

You have positive theta (options decay) coming your way from one or more of the following:  calendars, butterflies, short calls, short puts, short verticals, short strangles or short straddles.

Your brokerage platform “Risk Profile” tells you to expect a significant mark-up in your profit-and-loss (P/L) tomorrow.  And an even bigger amount the next day.  Terrific.

Only it never arrives, at least not the next day. Or the next. You may be flat versus the expected gain or you may even have a loss vs. today's P/L.

How can that even happen?    What gives?  Where’s my theta?  Why isn't the market paying me my due?  I did everything “right!”

If you’ve tried a time or two or more to make profits out of options “decay,” you likely have had this unnerving experience, unnerving because one soon learns to distrust the “graphic instrumentation,” a.k.a., the risk curve.  So, we asked some seasoned options pros about this phenomenon:  the difference between what you see and what you get.  Here's what they said: