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What is an option's expiration date, in plain words?

The expiration date is the day the option's right ends; monthly stock options generally expire around the third Friday of the month, and some contracts expire on other schedules 1. Before then, part of an option's price is time value, which usually shrinks as expiry nears and is zero at expiry 2.

A $50 stock and a call with a $50 strike at 30% implied volatility (made-up numbers). Move the days left and see what one more day takes.

Source: the StrikePath engine, pricing with the Black–Scholes formula 3 at 4.3% interest a year; a simulated example, not market prices. For learning; not advice.

Time value runs out

Time decay tends to be gradual at first and to speed up as expiration approaches; options near the stock's price are the most exposed 4. At expiry what is left is intrinsic value alone 2.

At expiry

An expiring stock option a cent or more in the money is normally exercised automatically unless instructed otherwise 5; one out of the money is generally left to expire 6.

What this shows, and what it doesn't

Model prices with the stock and volatility held still. Brokers set their own cut-off times for instructions on expiry day 7.

Go further

What happens if my call expires in the money? →The automatic exercise.What happens if my option expires out of the money? →It simply expires.
Sources (7), checked 20 October 2026 and 27 October 2026
  1. US Securities and Exchange Commission, Investor.gov, “An Introduction to Options” (investor bulletin, updated 16 July 2026). Read it (read 20 October 2026)
  2. CME Group, “Calculating Options Moneyness & Intrinsic Value” (Introduction to Options course). Read it (read 27 October 2026)
  3. 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)
  4. The Options Industry Council, “Theta”. Read it (read 20 October 2026)
  5. 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)
  6. The Options Industry Council, “Exercising Options”. Read it (read 27 October 2026)
  7. 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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