Options such as these are often used to hedge a portfolio and, because they represent a basket of stocks, the security underlying the option is more stable. The strike prices, or target prices, tend to hold up better as a result, so it makes sense to have more and more frequent expiration date possibilities.
They are otherwise the same as other securities options and are available on thousands of equities and a select group of index funds as either calls or puts. Personal Finance. Technical Analysis Basic Education. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content.
Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Your Practice. Popular Courses. Table of Contents Expand. What Is an Option Cycle? How an Option Cycle Works.
Option Cycle Assignments. Special Considerations. Less Common Expiration Cycles. If you don't agree with any part of this Agreement, please leave the website now. Any information may be inaccurate, incomplete, outdated or plain wrong. Macroption is not liable for any damages resulting from using the content. Strike vs. Market Price vs. What Is Expiration Time? Key Takeaways The expiration time is the precise date and time at which derivatives contracts cease to trade and any obligations or rights come due or expire.
Typically, the last day to trade an option is the third Friday of the expiration month. Derivative contracts will specify the exact expiration date and time. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
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Investopedia does not include all offers available in the marketplace. The last trading day is the final day that a contract may trade or be closed out before the delivery of the underlying asset or cash settlement must occur. Triple Witching Definition Triple witching is the quarterly expiration of stock options, stock index futures, and stock index options contracts all on the same day.
Automatic Exercise Definition Automatic exercise is a procedure where the Option Clearing Corporation will automatically exercise an "in the money" option for the holder. What Is Quadruple Witching? Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously.
Witching Hour Definition The witching hour is the final hour of trading on the days that options and futures expire. Expiration Date Derivatives Definition The expiration date of a derivative is the last day that an options or futures contract is valid. Partner Links. Related Articles. European Options. Investopedia is part of the Dotdash publishing family.
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