Expiration date

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Related to Exercise Dates: Exercising an Option

Expiration date

The last day (in the case of American-style) or the only day (in the case of European-style) on which an option may be exercised. For stock options, this date is the Saturday immediately following the third Friday of the expiration month; brokerage firms may set an earlier deadline for notification of an option holder's intention to exercise. If Friday is a holiday, the last trading day will be the preceding Thursday.
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Expiration Date

The date by which an option contract is abandoned and becomes worthless unless it is exercised. In an option contract, the holder has the right, but not the obligation, to buy or sell (depending on the type of option) the underlying asset within a certain period of time. The expiration date is the time at which the holder will lose the right to exercise the option. A European option can only be exercised on the expiration date, while an American option can be exercised at any point prior to the expiration date.
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expiration date

The last day on which an option holder may exercise an option. This date is stated in the contract at the time the option is written.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Expiration date.

The expiration date is the day on which an options contract expires and becomes worthless. Listed options always expire on the Saturday following the third Friday of their expiration month.

For example, if you hold an American-style September equity option, you can exercise it any time before the end of trading on the third Friday in September, or whatever cutoff time your brokerage firm sets. In contrast, European-style options can be exercised only at expiration, usually on Friday.

Under specific circumstances, listed options will be exercised automatically at expiration unless the owner gives instructions not to exercise them.

Unlike the standard term of a listed option, the expiration date of an over-the-counter option is negotiated at the time of the trade.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
On the last exercise date [t.sub.6], the firm will take on the project if the NPV on this date is positive.
On the next exercise date [t.sub.5], the firm is faced with the choice between immediately exercising the ITO (investing) or continuing to hold the ITO.
This procedure of comparing on each exercise date the NPV and the value of the rights by waiting for the next exercise date and carrying backwards the higher of the two values is continued to the current, [t.sub.0].
to pay the bargained-for premium on the exercise date either as
during the interval of time leading up to the exercise date. In effect,
exercise date the future value of the original premium amount,
entire amount unconditionally payable on the option exercise date would
obligation to pay the option premium until the option exercise date, H
exercise date. None of this is meant to argue that such an approach