Expiry Date

The last date on which an option or futures contract exists; after it the contract ends.

Example

An option expiring on the third Friday of the month is worthless the next day if it was not in the money.

Important

Being right about direction but late about timing can still lose the whole premium.

Related terms

  • Time Decay — The loss of an option's time value as expiry approaches, usually faster near the end.
  • Option Premium — The price paid by an option buyer to the seller for the contract.

Lessons that explain it

  • A contract about a price, not a piece of anything — An option or future is an agreement whose value depends on another asset. You own a right or an obligation with an expiry date, not a share of a business. (10 min)

All 578 terms in the Investing glossary