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What happens if my option expires out of the money?

An option out of the money has no intrinsic value 1, and options that expire out of the money are generally not exercised: their owners let them expire 2. For a bought option the whole premium is lost, and no more 3.

A $50 call and a $50 put, each bought for its model price with 30 days left at 30% implied volatility (made-up numbers). Set where the stock closes on expiry day.

Source: the StrikePath engine, pricing with the Black–Scholes formula 4 at 4.3% interest a year; a simulated example, not market prices. For learning; not advice.

Nothing to do

A call is out of the money when the stock is below its strike, and a put when the stock is above it 5. At expiry there is no time value left 6, so the option is worth nothing. The $50 call above cost $1.80 a share by the formula 4: $180 for one contract, all of it lost if the stock closes at or below $50.

A cent the other way

An expiring stock option a cent or more in the money is normally exercised automatically unless instructed otherwise 7. Near the strike, a move after the close can change whether an option is exercised, and each broker sets its own cut-off time for instructions 8 2.

What this shows, and what it doesn't

The buyer's side, before fees. For someone who sold the option, expiring out of the money means keeping the premium, which is theirs once received 3.

Go further

What happens if my call expires in the money? →The automatic exercise.What does in the money mean? →Intrinsic and time value.
Sources (8), checked 20 October 2026 and 27 October 2026
  1. The Options Industry Council, “Options Pricing”. Read it (read 27 October 2026)
  2. The Options Industry Council, “Exercising Options”. Read it (read 27 October 2026)
  3. US Securities and Exchange Commission, Investor.gov, “An Introduction to Options” (investor bulletin, updated 16 July 2026). Read it (read 20 October 2026)
  4. Fischer Black and Myron Scholes, “The Pricing of Options and Corporate Liabilities”, Journal of Political Economy 81(3), 637–654, 1973. Read it (read 20 October 2026)
  5. The Options Industry Council, “What is an Option?”. Read it (read 27 October 2026)
  6. CME Group, “Calculating Options Moneyness & Intrinsic Value” (Introduction to Options course). Read it (read 27 October 2026)
  7. US Securities and Exchange Commission, Release No. 34-57163 (16 January 2008), approving OCC's change to exercise by exception, 73 FR 4298. Read it (read 20 October 2026)
  8. FINRA, “Trading Options: Understanding Assignment” (14 December 2020). Read it (read 27 October 2026)

Now try it on a scenario of your own

Pick where a simulated stock might be, and by when: drag one dot and see, side by side, what buying shares, one option, or a pair of options (a call or put spread) would each do. Free, no sign-up.

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