When Do Options Expire? AM or PM? Find Out the Answer Here

When do options expire: AM or PM?

Options expire at specific times throughout the day, and the time of expiration depends on several factors. One of the most common questions new traders have is whether options expire in the morning (AM) or the afternoon (PM).

Table Of Contents

The answer to this question is that options can expire at either AM or PM, depending on the exchange and the type of option. In general, most stock options and index options expire at the close of trading on the third Friday of the expiration month. This means that options will typically expire in the afternoon, around 4:00 PM Eastern Standard Time.

However, it’s important to note that there are exceptions to this rule. For example, some index options, such as the S&P 500 Index options, may have different expiration times. Additionally, certain types of options, such as weekly options, may have different expiration days and times.

It’s always important to check the specific expiration dates and times for the options you are trading. This information can usually be found in the options chain or from your broker. By understanding when options expire, you can better plan your trading strategies and avoid any unexpected surprises.

When Do Options Expire?

Options expire on a specific date known as the expiration date. This is the date when the option contract becomes null and void and no longer holds any value.

Options can expire on either the third Friday of the month (for stock options) or the Saturday following the third Friday (for index options). These expirations are known as standard expiration dates.

In addition to the standard expiration dates, there can also be weekly expiration dates for certain options. These weekly expirations occur on every Friday of the week except for the standard expiration week.

The expiration time for options can vary depending on the exchange or market where they are traded. Most options in the US stock market expire at 4:00 PM Eastern Standard Time (EST) on their expiration date. However, there are some exceptions, such as options on certain ETFs (Exchange Traded Funds) which expire at 4:15 PM EST.

It is important for options traders to be aware of the expiration date and time of their options contracts. They should plan their trading strategies accordingly and be prepared to close out their positions before the expiration date if necessary.

AM or PM? Find Out the Answer Here

Options contracts generally expire on the third Friday of the expiration month. The specific expiration time, however, depends on whether the options are classified as “American-style” or “European-style.”

American-style options can be exercised at any time up until the expiration date, including both before and after market hours. This means that American-style options typically expire at 4:00 PM Eastern Standard Time (EST) on the third Friday of the expiration month.

On the other hand, European-style options can only be exercised at expiration, meaning they can only be exercised on the expiration date itself. As a result, European-style options expire at the market close on the expiration Friday, which is usually at 4:00 PM EST.

It’s important to note that these expiration times may vary depending on the exchange and the individual contract. Therefore, it is always best to check the specific terms and conditions of the options contract you are trading to determine the exact expiration time.

In summary, American-style options expire at 4:00 PM EST on the third Friday of the expiration month, while European-style options expire at the market close on the expiration Friday, also typically at 4:00 PM EST.

Read Also: Discover Risk-Free Forex Strategies: Minimize Your Trading Risks

Options Expiration Time:

Options contracts have a specific expiration time, which is when the contract ceases to be valid. This expiration time is determined by the exchange on which the options are traded.

Typically, options expire on the third Friday of the respective expiration month. However, there are exceptions to this rule, such as weekly options that expire on Fridays or options with different expiration cycles.

The exact time of options expiration can vary depending on the exchange. Most options contracts in the United States expire at 4:00 PM Eastern Time. This is also the time when the final trading price of the underlying asset, which determines the value of the options, is determined.

It is important for options traders to be aware of the expiration time, as they need to decide whether to exercise or close their positions before the options contract expires. If the options contract is not closed or exercised before the expiration time, it will expire worthless and the trader will lose any potential profit or the premium paid for the options.

Read Also: Understanding the Relationship between Dividends and Stock Options

To avoid any confusion or misunderstanding, it is always recommended to check the specific expiration time for the options contracts being traded, as it may vary depending on the exchange or the specific contract.

Understanding the AM and PM

AM and PM are abbreviations for the Latin terms “ante meridiem” and “post meridiem,” which mean “before noon” and “after noon,” respectively. These terms are used to indicate the time of day and are commonly seen on digital and analog clocks as well as in the context of options expiration.

In the context of options expiration, AM and PM refer to the specific times when options expire. The expiration time varies depending on the type of option and the exchange on which it is traded.

For example, in the United States, most index options and ETF options expire at the close of trading on the third Friday of the expiration month. This time is typically referred to as 4:00 PM Eastern Time (ET).

In contrast, equity options in the United States expire at the close of trading on the third Saturday of the expiration month. This time is typically referred to as 11:59 AM Eastern Time (ET).

It’s important for options traders to be aware of these expiration times as they can impact trading strategies and the value of options positions. Traders should also note that different exchanges may have slightly different expiration times, so it’s important to consult the specific exchange’s rules and regulations.

Overall, understanding the AM and PM and their significance in the context of options expiration is essential for anyone involved in options trading. By being aware of these times, traders can better manage their positions and make more informed trading decisions.

Term	Meaning
AM	Ante meridiem (before noon)
PM	Post meridiem (after noon)

FAQ:

When do options expire?

Options expire on the third Friday of the expiration month.

Do options expire in the morning or the afternoon?

Options expire in the afternoon, at 4:00 PM Eastern Time.

Is there a specific time zone for option expiration?

Yes, options expire at 4:00 PM Eastern Time, regardless of the time zone you are in.

Do all options expire on the same day?

No, options have different expiration dates depending on the contract month. They all expire on the third Friday of the expiration month.

What happens if I hold an option past its expiration date?

If you hold an option past its expiration date, it will usually expire worthless and you will lose your investment.

Step-by-Step Guide: Installing Qtiplot in Ubuntu

Step-by-step guide: Installing Qtiplot in Ubuntu If you are a data scientist or researcher and work with data analysis and visualization, Qtiplot is a …

Read Article