Expiration Dates

Categories: Derivatives, Metrics

If you buy stock options, the expiration date is the last day you have to exercise your options (i.e., either buy or sell the stocks at the strike price).

If you wait past the expiration date, your options expire and become worthless: you can’t sell it or trade it or use it to buy or sell stocks, and whatever money you’ve paid for the stock option has now gone up in smoke.

That’s why it’s as important to pay attention to option expiration dates as it is to pay attention to the expiration dates of stuff in your fridge. Usually, the expiration date for stocks in the U.S. is the third Friday of the month. 

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