Expiration date

The expiration date is the last day an options contract is valid. An option is a contract that gives its buyer the right, but not the obligation, to buy or sell a specific stock (or other asset) at a set price, called the strike price, by a certain date. Once that date passes, the contract stops existing — it either gets exercised (used) or it simply expires worthless.

Every option has this built-in deadline, which is part of what separates it from just owning a stock outright. As expiration approaches, the option's value tends to erode faster, a phenomenon traders call "time decay," because there's less and less time left for the underlying stock to move in a favorable direction. On the expiration date itself, the option's fate is usually decided based on where the stock price sits relative to the strike price.

The nuance that trips people up is that the expiration date is not necessarily the last day you can trade the option, and the mechanics of exactly which calendar day counts as "expiration" for a given monthly options cycle have shifted over time and can depend on the exchange and the specific contract (standard monthly options, weekly options, and index options don't all follow identical schedules). There can also be a separate, earlier cutoff set by your own broker for telling them you intend to exercise the option, which is distinct from the market's own expiration cutoff.

Because of this, traders generally treat "expiration date" as a concept — the contract's hard deadline — and then check the specific date and time rules for the exact contract they're trading rather than assuming a fixed pattern.