When Do SPX AM Options Expire? - A Complete Guide

When do SPX AM options expire?

Options trading is a complex and ever-evolving field, and understanding the expiration dates of these options is crucial for success. If you are trading SPX AM options, it is important to know when these options expire and how it can impact your trading strategies. This complete guide will provide you with all the information you need to know about the expiration dates of SPX AM options.

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SPX AM options are options contracts that are based on the S&P 500 Index, and they have a unique expiration date and time. Unlike regular options that expire at the end of the trading day, SPX AM options expire at the opening of the market on the expiration day. This means that if you are holding SPX AM options, you need to be prepared to take action before the market opens on the expiration day.

One important thing to note is that the expiration date for SPX AM options is the third Friday of the month. However, if the third Friday is a market holiday, the expiration date will be the Thursday before the holiday. This is an important consideration when planning your trading strategies, as market holidays can impact the liquidity and trading volume of SPX AM options.

In conclusion, understanding the expiration dates of SPX AM options is essential for successful options trading. Knowing when these options expire and the specific time at which they expire can help you plan your trading strategies effectively. By staying informed and staying ahead of the expiration dates, you can maximize the potential profits and minimize the risks of trading SPX AM options.

When Do SPX AM Options Expire?

SPX AM options, or S&P 500 Index options with an AM settlement, expire on the Saturday following the third Friday of the expiration month. The AM settlement means that the contract’s final settlement value is calculated based on the opening prices of the component stocks in the S&P 500 Index on the expiration date.

This settlement method differs from PM settlement, where the final value is determined by the closing prices of the component stocks. The AM settlement allows market participants to react to any news or events that occur during the trading session on the expiration date.

It’s important to note that AM options trade until 4:00 PM Eastern Time on the last trading day, which is typically the third Friday of the expiration month. After this time, no new positions can be opened, and traders can only close existing positions.

Expiring AM options can be exercised until 5:00 PM Eastern Time on their expiration date. If the option holder chooses to exercise the option, they will be assigned a long or short position in the underlying S&P 500 Index futures contract, depending on whether they held a call or put option.

To determine the expiration date of a specific SPX AM option contract, traders should refer to the expiration calendar provided by the exchange on which they are trading. This calendar will list the expiration dates for all options contracts, including SPX AM options, for the current year and possibly future years as well.

In summary, SPX AM options expire on the Saturday following the third Friday of the expiration month. Their final settlement value is based on the opening prices of the component stocks in the S&P 500 Index on the expiration date, and they can be exercised until 5:00 PM Eastern Time on that date. Traders should consult the exchange’s expiration calendar for specific expiration dates.

Understanding the Expiration Date of SPX AM Options

SPX AM options, or options on the S&P 500 Index that settle in the morning, have a unique expiration date compared to regular monthly options. While regular monthly options expire on the third Friday of the month, SPX AM options expire on the third Friday morning at the market opening time.

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This means that traders who hold SPX AM options need to be aware of not only the date but also the time of expiration. The options will expire and settle within minutes of the market opening on the third Friday morning.

To illustrate, let’s say the third Friday of the month falls on the 15th. Regular monthly options would expire at the end of the trading day on the 15th. However, SPX AM options would expire and settle in the morning of the 15th, right at the opening bell.

It is important to note that SPX AM options cannot be exercised after Thursday, the day before expiration. Traders who do not want their options to expire should make sure to close out their positions or roll them over to a future expiration date.

Understanding the expiration date of SPX AM options is crucial for traders to effectively manage their positions. It is recommended to closely monitor the expiration date and time, as well as any market events or news that may impact the underlying index leading up to expiration.

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Key Points about the Expiration Date of SPX AM Options

By keeping track of the expiration date and understanding the unique characteristics of SPX AM options, traders can effectively plan their strategies and avoid any unwanted surprises at expiration.

FAQ:

When do SPX AM options expire?

SPX AM options expire on the third Friday of the month.

What is the difference between SPX AM options and PM options?

The main difference between SPX AM options and PM options is the time of expiration. SPX AM options expire at the market close on the third Friday of the month, while PM options expire at the market open on the following Monday.

Are SPX AM options settled in cash or physical delivery?

SPX AM options are settled in cash. This means that if the option is exercised, the option holder will receive or pay the cash difference between the exercise price and the current market value of the underlying asset, rather than receiving or delivering the actual asset.

Can SPX AM options be exercised early?

No, SPX AM options cannot be exercised early. They can only be exercised on the expiration date, which is the third Friday of the month.

What happens if I hold SPX AM options until expiration?

If you hold SPX AM options until expiration and the options are in-the-money, they will be automatically exercised. If the options are out-of-the-money, they will expire worthless and you will lose the premium you paid for the options.

What is the expiration date for SPX AM options?

The expiration date for SPX AM options is the third Friday of every month.

Can you give me an example of when an SPX AM option would expire?

Sure! Let’s say the current month is October and the third Friday falls on October 15th. That would be the expiration date for SPX AM options in this case.