Definition
The expiration date is the final day on which an option holder can exercise their right to buy or sell the underlying asset. After this date, the option becomes worthless if not exercised. Options lose time value as expiration approaches, a phenomenon known as time decay or theta decay.
Example
A March 15 expiration option must be exercised by market close on March 15, or it expires worthless.
FAQ
What is Expiration Date?
The last day an option contract can be exercised.
Why is Expiration Date important?
Expiration Date helps investors evaluate options and make more informed decisions.