Expiration Date

The expiration date is the last day on which an options or futures contract is valid, after which it can no longer be exercised, and any rights or obligations under the contract cease. For options, this is the final day the holder can exercise their right to buy (call option) or sell (put option) the underlying asset. In futures trading, the expiration date is when the contract must be settled, either by delivering the physical asset or through cash settlement. The expiration date is a crucial aspect of derivatives trading, as it defines the time frame in which an investor must make their decision or take action.

Example

An options contract with an expiration date of September 30th means the holder must exercise their option by that date or let it expire worthless.