Take these calls for example:

Call                        Time of expiration
SBUX Jan13 55 Call          2012-01-18 4PM EST
FIO Jan13 22 Call           2012-01-18 4PM EST
FB JanWk4 32 Call           2012-01-25 4PM EST
NVDA Mar13 13 Call          2012-03-15 4PM EST
ZNGA Mar13 3 Call           2012-03-15 4PM EST

My questions:

  1. Are these the correct date and times of expiration?
  2. After the time of expiration, what happens to the options?

4PM is the market close in NYC, so yes, time looks good.

If "out of the money," they expire worthless. If "in the money," it depends on your broker's rules, they can exercise the option, and you'll need to have the money to cover on Monday or they can do an exercise/sell, in which case, you'd have two commissions but get your profit.

The broker will need to tell you their exact procedure, I don't believe it's universal.

  • Are those dates of expiration right? Specifically, does a JanWk4 call end on 2012-01-25 and does a Mar13 call end on 2012-03-15? – Kirk Ouimet Jan 16 '13 at 21:22
  • Standard options are third Friday of the month. I understand there are new options with weekly expirations, so I'll trust that's correct, but no personal familiarity with them. – JTP - Apologise to Monica Jan 16 '13 at 21:25

Equity options, at least those traded in the American exchanges, actually expire the Saturday after the 3rd Friday of the month. However, the choice to trade or exercise the options must be specified by the 3rd Friday.

This is outlined by the CBOE, who oversees the exchange of equity options. Their FAQ regarding option expiration can be found at http://www.cboe.com/LearnCenter/Concepts/Beyond/expiration.aspx.


Here is the answer from my brokerage:

Regular equity monthly options expire on the 3rd Friday of every month. The last time to trade them is by market close at 4 PM Eastern time. The weekly options will expire on the Friday of that week, also with a last trading time of 4 PM Eastern time.

Options that expire in the money by .01 or more are automatically exercised. If you are long an option that is out of the money at expiration, it will expire worthless. If you are short an option, even if it expires out of the money, you are still at risk for possible assignment since the long option holder always has the right to exercise an option prior to expiration.*

  • Note that the risk for assignment at any time applies only to American style options, which covers most equity options. However, index options follow European style rules which only allow them to be exercised just prior to expiration. – Jimmy Apr 14 '13 at 3:50

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