When Does an Option Expire?

The two types of options, calls and puts, give holders the right to buy or sell the underlying securities at certain prices, known as strike prices, before specified expiration dates. These contracts can rapidly lose value the closer they get to expiration. Therefore, you should keep track of the expiration dates so that you can close out your positions or exercise your rights to buy or sell the underlying securities.

Regular Expiration

Equity and index options typically expire on the third Friday of each month. The expiration date is technically the Saturday following the Friday, but Friday is the last opportunity to trade the options. If that Friday is a designated holiday, Thursday is the last trading opportunity. According to the Options Industry Council, options expire on the third Friday because that day has the fewest scheduling problems, such as designated holidays. Some stocks have options expiring in every month, and others have options expiring every two or three months.

Quarterly and Weekly Expiration

Quarterly and weekly options trade for certain securities. Quarterly options expire on the last Friday of each quarter, meaning that options on the same stock could be expiring on both the third and fourth Fridays of a particular month. Weekly options are typically listed on Thursdays and expire the following Friday. These short-term options provide investors additional opportunities to respond to material news events, such as corporate earnings reports, industry reports and government economic data.

LEAPS

Long-Term Equity Anticipation Securities are contracts with expiration dates of up to three years into the future. Equity LEAPS contracts expire on the third Friday of January in the expiration year. LEAPS provide additional flexibility because of their longer time to expiration. You do not have to worry about options expiring in a few weeks or months. Longer-dated options are more expensive, so LEAPS contracts cost more than the regular options that expire in nine months or less.

Triple Witching

"Triple witching" occurs on the third Fridays of March, June, September and December. This is when options, index futures and options on index futures expire concurrently. "Double witching" occurs when any two of these derivative contracts expire at the same time. Markets tend to be particularly volatile on double- and triple-witching days because of the additional trading volume related to the settlement of open options and futures contracts.

Information Sources

Market information on options, including expiration calendars, is available on various financial websites, such as the options trading section of your online broker. This information includes the various strike prices and expiration months for available stock options. The expiration date, in year-month-day format, is usually part of an option symbol.