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Options Expiration Calendar
But for the buyer of options, an overlooked option expiration can equate to trading losses. Public holders of options contracts, however, must indicate their desire to trade no later than PM on the business day preceding the option expiration date. Most exchange-traded options contracts follow a predetermined expiration system. Equity stock option contracts listed on the US exchange will always expire on the Saturday that follows the third Friday of the month.
An exception occurs in the case of a market holiday, in which case the expiry is on the Thursday right before Friday. For holders who need to notify the exchange of their intent to exercise a trade, it is important to know that the notification limits how late you can notify vary based on where the product trades. Most traders do not hold an options contract until its expiration date; they will move out of the position rather than exercise it or let it expire.
Traders should consult their broker regarding expiry, as some brokers will have different notification limits.
Weekly options contracts are shorter than regular monthly options. They expire every week, generally at market close on Fridays. Similar to regular options, exceptions include market holidays, in which case the weekly contract option would close on Thursday instead of Friday. American-style index options contracts, like equity options, can be exercised any time before expiration, up to and including the third Friday of its expiration month. Similar to American-style index options, some European-style index contracts expire at the end of the day. Some options expire in the morning, however, so it is important to be aware of this and know your expiry times when trading European-style index options.
Most monthly index options contracts expire in the morning, while weekly options expire in the afternoon. As with other options contracts, notifications of intent to exercise must be done the day before. Experienced traders have a keen awareness of when the options they have bought or sold will expire. Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website.
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For that reason, it is important to understand, not just when the expiration is approaching, but also when the last day to trade that put or call is.
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For if the position is not closed out, then it will either expire worthless or be subject to auto-exercise. The last trading day can vary based on the type of options contracts or product. Here are a few guidelines that might help.
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Once an option position is opened, it can be closed at any time through an offsetting transaction. I can buy-to-open or sell-to-open new positions.
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After that, I can sell-to-close or buy-to-close to exit the trade. If an option is in-the-money and the position is held to expiration, the contract will be subject to auto-exercise. For that reason, the last day to trade equity and ETF options is on the Friday before the expiration. If the position is not closed out by the close of trading on expiration Friday, it's too late.
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The contract will either expire worthless or be subject to auto-exercise. Equity and ETF options also have the American-style exercise feature and can be exercised at any time prior to expiration. Therefore, if short a January 30 call on MSFT and the contract is in-the-money in the days heading into the expiration, you are at the risk of assignment. At that point, it is too late to close the position out. The contract no longer exists. It has been exercised. Click here for more tips on anticipating assignment of short options contracts.
While American-style option contracts can be exercised at any time prior to the expiration, European-style contracts are only exercised at the expiration.
RUT have European-style options contracts. In addition, most cash indexes settle based on the opening prices of their components on the Friday before expiration. Since the settlement values for the options contracts are computed using Friday morning price, the last day to trade the options contracts is on the Thursday before expiration. If you wait until Friday, it's too late.