expiration(redirected from Passive expiration)
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The time an option contract lapses.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
The relinquishment of the rights of an options contract by permitting the contract to terminate on the expiration date. Also called abandonment.
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.