When exactly does an option expire?

Question

I know it is the 3rd friday of the month, but is it friday before the bell or friday after the bell when the option is considered "expired"

Answer 1

If it is an option on a stock, it expires on the "Saturday immediately following the third Friday of the expiration month."

http://www.cboe.com/Products/EquityOptionSpecs.aspx

Many options on indexes have other expiration dates. You can look up specifications for different index options at

http://www.cboe.com/Products/Cash-SettledIndexOptions.aspx

There are also weekly and quarterly options, options on index rates, etc. To find the specifications for those options mouse over the "products" tab on the above page.

For options on futures you will need to look up the specifications on the futures exchanges where they are traded.

Answer 2

When an option (put or call) expires, it becomes worthless. The option itself only has value to sell to someone else BEFORE it expires. An option is a bet, that the stock will rise or fall during the option period. Then, you exercise your right to buy or sell at the fixed price OR you sell the option. IF you do not exercise your right to buy or sell or let the option expire, whatever value it HAD ceases to exist, in the same manner as a bet you make on a horse... Before the race is over, you COULD sell your ticket to someone else... but if you do not sell your ticket and the race ends and you do not win, too bad... So, you already paid the money for the option. When it expires, nothing happens since you already paid the money. The person holding the shares just made money off you and they STILL retain ownership of the shares. A call option essentially is a person who owns shares of stock offering it for sale under certain conditions. His bet is the price of his stock will not rise to the striking price of the option. He offers you the right to buy those shares at a fixed price over the next 90 days and for this right, you pay a fee. If the stock price does not rise, you will not exercise the right to buy stock at something over market and accept the fee as a loss. If the prices rises,the closer it gets to the striking price, the more value the option has. You could sell it for more than you paid, and make a little money. If it exceeds the strike price, you can make a lot, either by selling the option or by exercising the option and then immediately selling to take the profit. Either way, you already paid the fee up front, so if you do not exercise the option or sell it and it expires, you are out whatever you paid, no more, no less.

Answer 3

Well options actually expire on the 3rd Saturday of the month, but they stop trading at the close of trading on the Friday before because the stock market is not open on Saturday.

Answer 4

Options expire on the 3rd Saturday, but if you know of any brokers open to trading on Saturday I would be surprised.

So for trading options, the limit is the bell on 4:00 EST the 3rd Friday. If you have open orders on options after the bell, I've seen them settle out in trades up to 4:30 that Friday (you just can't open new orders).

If they are in the money, then you will be assigned on Saturday (for your Monday morning review) if you are withing .05 of the strike price.

Answer 5

Before the bell (market still open) it is not expired. The actual time is 3:10 EST, after the bell option exercises are determined by lottery.

Answer 6

after the bell. The books are balanced on saturday.

Answer 7

check the Option Exchange's rules?