Options & derivatives
Expiration date
The expiration date is the day an option ceases to exist: after it, the right it grants disappears.
The expiration date is the day an option ceases to exist: after it, the right it grants disappears.
As expiry nears, an option loses time value (this is "theta"). An out-of-the-money option at expiration is worthless. Choosing the expiry is therefore as important as choosing the strike.
A call expiring Friday that stays out of the money loses all its value that day.
Understanding a term is good. Applying it on a real platform with a clear method is better. That is exactly what we do in 5 days.