Expiration

The date on which the option ends; after it, the contract either settles in the money or expires worthless.

Expiration is the date on which an option contract ceases to exist. After the market closes on that day, the contract is either exercised, settled or simply gone, and any right it gave you disappears with it. This is why time is such a central part of an option: every day that passes, the clock ticks down through theta, and an out of the money option keeps losing value as expiration approaches.

In practice, the expiration date you choose shapes the whole trade. A weekly option is cheap but decays fast, while an option three months out costs more premium yet gives your thesis room to play out. Say you buy a call with a strike of 100 that expires this Friday and the stock is sitting at 98. If it never crosses 100 before Friday's close, the call expires worthless and you lose the entire premium.

A common mistake is holding a long option into expiration hoping for a last minute move that rarely comes. Another is forgetting that an in the money option can be auto exercised, leaving you with a stock position and a margin bill you did not plan for. Manage or close positions before that final day rather than letting expiration decide for you.

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All options terms

Call Put Strike price Premium In the money (ITM)At the money (ATM)Out of the money (OTM)Intrinsic value Time value (extrinsic)Delta Gamma Theta Vega Implied volatility (IV)Open interest Assignment Exercise Spread Break-even Probability of profit (POP)Assignment risk / early assignment LEAPS Naked (uncovered) option Rho Historical volatility (HV)Volume Bid-ask spread Moneyness Covered call Cash-secured put Vertical spread Iron condor Straddle Strangle Rolling Margin Max pain American-style option European-style option Contract multiplier Debit vs credit Volatility skew The Greeks Underlying Hedge Leverage Expected move Notional value Protective put Collar Butterfly spread Iron butterfly Calendar spread Diagonal spread Credit spread Debit spread Bull call spread Bear put spread Ratio spread Synthetic position The wheel strategy Poor man’s covered call (PMCC)Box spread Put-call parity Pin risk IV crush IV rank / IV percentile Ex-dividend date Deep in the money Weeklys 0DTE (zero days to expiration)Order types (to open / to close)Buying power reduction Cash settlement Market maker Slippage Mid price Black-Scholes model

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.