An option’s expiration date is the final day on which an option can be traded or exercised. All options have an expiration date associated with them.
ITM options are automatically exercised at expiration. OTM options cease to exist beyond expiration, removing any obligation tied to them.
Expiration generally takes place on a Friday, although there are exceptions in some index options. For standardized monthly options, expiration typically takes place on the third Friday of the month. Weekly options are also available on some issues.
If Friday is a holiday, the final trading day will be the preceding Thursday.
American Style: Options may be exercised on any business day up until expiration.
European Style: Options may only be exercised at expiration.
Return to the main options glossary page to learn more terms.