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The last day an option contract is valid.
Why It Matters
Expiration is the ticking clock that makes options different from stocks. An option losing $10/day in the final week isn't unusual. Weekly options (expiring every Friday) are popular for quick trades but decay fastest.
Key Points
- Options expire on the third Friday of the month (monthlies) or every Friday (weeklies)
- Time decay (theta) accelerates in the final 30 days - options lose value faster
- Most traders close positions before expiration to avoid assignment complications
Related Terms
Common Questions
The last day an option contract is valid. Expiration is the ticking clock that makes options different from stocks. An option losing $10/day in the final week isn't unusual.
Expiration is the ticking clock that makes options different from stocks. An option losing $10/day in the final week isn't unusual. Weekly options (expiring every Friday) are popular for quick trades but decay fastest.
Options expire on the third Friday of the month (monthlies) or every Friday (weeklies)
Time decay (theta) accelerates in the final 30 days - options lose value faster
Most traders close positions before expiration to avoid assignment complications