On This Page
Key Takeaways
- OPEX is the expiration event for a set of contracts, and each product’s specification sets its own last trading time and settlement.
- Monthly US equity options traditionally expire on the third Friday, while weekly and daily listings create many additional expiration dates.
- Equity options $0.01 or more in the money are exercised by exception unless the clearing member submits contrary instructions.
- Settlement style, last trading time, exercise style, and deliverable depend on the contract specification.
- Expiration concentrates closing, rolling, exercise, assignment, and hedge adjustments into one session; the expiring open interest and the flow show which way that pressure leans.
What is options expiration (OPEX)?
Options expiration, often shortened to OPEX, is the date and settlement process when an option contract ends and its remaining exercise rights are resolved. At that point each open contract moves into final exercise, assignment, or lapse. Traders also use the term for a session in which a major group of contracts expires together.
The traditional monthly US equity cycle centers on the third Friday. Weekly and daily series add more dates, and the quarterly cycle includes March, June, September, and December. Use the listed contract date and the exchange calendar for the exact session.
What happens to options at expiration?
Before the trading deadline, a long holder can sell to close and a short writer can buy to close. American-style holders also have the exercise right before expiration. A roll combines an exit from the current option with entry into a later expiration.
For expiring equity options, exercise by exception uses a $0.01 in-the-money threshold as the default. Clearing members submit the final exercise instructions, including exercise below the threshold and non-exercise above it. Customer instructions go through the broker’s stated cutoff.
Standard equity-option exercise exchanges shares and strike cash. Cash-settled index products transfer the exercised intrinsic value in cash. The series determines the multiplier, deliverable, settlement value, and final trading time.
Options expiration example: a $50 call
A trader owns one Friday-expiring XYZ $50 call, XYZ closes at $52.20, and the contract is handled as a standard 100-share equity option.
- Expiration intrinsic value = ($52.20 − $50.00) × 100 = $220
- Exercise requires buying 100 shares at $50, or $5,000 of purchase value.
- If the call was purchased for $1.40, expiration profit before costs = ($2.20 − $1.40) × 100 = $80.
The call has $220 of closing intrinsic value and an $80 expiration gain against its $140 entry cost. Exercise buys 100 shares for $5,000. Use the final exercise instructions to determine the resulting position.
Exercise purchases 100 shares for $5,000. At the $52.20 close those shares are worth $5,220. From then on the 100 shares carry their own price exposure, so mark the stock position separately from the $80 option result.
How traders prepare for OPEX
Review every expiring leg, especially strikes near spot. Compare the option payoff in the options profit calculator. For a spread, separately map the stock delivery and strike cash from each exercise and assignment combination. Close or roll before the deadline when that is the intended exit.
At the market level, compare expiring open interest with the active strikes in options flow and the signed gamma profile. Identify the concentration that is leaving the chain and the later expirations receiving new trades. Read the price response together with liquidity and the day’s catalysts.
Limitations of OPEX
- Check each contract’s specification. Last trading time, settlement style, exercise style and deliverable differ by product, so equity and index options close out on different terms.
- Expiration concentrates closing, rolling, exercise, assignment and hedge adjustments; the expiring open interest, the gamma profile and the flow show which way that pressure leans.
- Send your own instruction before the broker cutoff. The $0.01 threshold is a default: clearing members can submit contrary instructions, and broker cutoffs and account equity control the customer outcome.
- The exercised call leaves 100 shares worth $5,220 at the close, and they keep moving after expiration. Plan for the stock position, or close the option before the deadline.
- Confirm the exchange calendar for expiration week; holidays and product-specific rules shift trading and settlement dates.
Bottom line
OPEX is the point where an option’s rights end and each open position resolves into a sale, exercise, assignment, or lapse. Know the contract’s last trading time, settlement style and broker cutoff, decide before the deadline whether to close, roll, or carry each leg, and plan for the shares or cash that follow.
Clear answers
Frequently Asked Questions
Sources and Further Reading
How entries are sourced, calculated and updated: editorial methodology.