Expiration Date
The last date on which an option can be exercised; after this date the contract ceases to exist.
The expiration date is the deadline for the option holder to exercise their right. For standard US equity options, expiry falls on the third Friday of the expiration month (or the prior Thursday if Friday is a holiday).
As expiration approaches, time value erodes — a phenomenon captured by theta. Options with shorter time to expiry have less time value, while longer-dated options (LEAPS) carry more.
On expiration, in-the-money options are automatically exercised by the OCC if they are at least $0.01 in the money, unless the holder instructs otherwise.
Related Terms
American vs European Option
Exercise style: American options can be exercised any time before expiry (most single-stock options); European options only at expiry (most cash-settled index options like SPX).
IntermediateButterfly Spread
A 3-leg defined-risk options strategy: buy 1 lower-strike, sell 2 middle-strike, buy 1 higher-strike — all at the same expiry. Max profit if price pins the middle strike.
IntermediateCalendar Spread (Options)
Sell a near-dated option and buy a longer-dated option at the same strike. Profits from faster near-term theta decay and favorable IV term structure.
IntermediateIntrinsic Value
The immediate exercise value of an option — how much in the money it is right now, ignoring time and volatility.
IntermediateMax Pain
The strike price at which the largest dollar value of options (calls + puts combined) would expire worthless — the theory being that price gravitates there into expiry as dealers delta-hedge.
AdvancedOpen Interest (Options)
The total number of outstanding (unclosed) option contracts at a given strike and expiry. Rising OI confirms new money entering; it gauges liquidity and where positioning is concentrated.
IntermediateOptions Chain
The quoted matrix of all available calls and puts for a given underlying, organized by strike and expiration date, showing bid/ask, IV, volume, and open interest.
BeginnerOptions Contract
A contract giving the buyer the right — but not the obligation — to buy or sell an underlying asset at a set price before or on expiration.
BeginnerTheta
The daily rate of time value erosion in an option's price, assuming all else stays constant. Usually negative for long options.
IntermediateTime Value
The portion of an option's premium beyond its intrinsic value, reflecting the probability that the option moves further in the money before expiry.
Intermediate