Options & derivatives
Expiry
Also called Expiration
The date after which an option ceases to exist.
How it works
At expiry an option is either exercised or worthless. There is no partial credit for having been right at some point in between.
The concentration of expiries on standard dates produces real effects in the underlying market, as positions are closed or rolled.
Where it misleads people
Being right about direction and wrong about timing loses the entire premium. This is the most common way retail option buyers lose money while having correctly predicted the move.
Related terms
- OptionA contract giving the right, but not the obligation, to buy or sell something at a set price by a set date.
- ThetaHow much value an option loses each day simply because time passes.
- PremiumThe price paid for an option, made up of intrinsic value plus time value.
- American and European optionsAmerican options can be exercised any time before expiry; European ones only at expiry.
Mentioned in
More in Options & derivatives
- Futures contract
- Derivative
- Delta
- Implied volatility
- Covered call
- Contract for difference
- Contango
- Notional value
All 30 Options & derivatives terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.