Glossary · Options

Expiration date

The date an option contract ends.

Every option dies at expiration. After that date, an out-of-the-money option is typically worthless, while in-the-money options may be exercised or settled according to the contract’s rules.

Time remaining is a major part of option value (time premium). As expiration approaches, time decay often accelerates — especially for at-the-money options. Choosing weekly vs. monthly expirations is a strategic decision about cost, risk, and how long your thesis needs.

Example

A call expires this Friday. If the stock stays below the strike through expiration, that call usually expires worthless and the buyer loses the premium paid.

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