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Expiry date definition
An expiry date is the final date on which a trading contract or instruction remains valid. After it passes, the instrument can no longer be exercised or executed. It applies to options, futures, forwards, warrants, and some pending order instructions.
As the expiry date approaches, the time value in an option's premium decays, so the option can lose value from the passage of time alone even if the underlying price does not move. In options trading the expiry date is the last date the option can be exercised, and an option with no value left at expiry becomes worthless.
The expiry date sets when the contract ends; the strike price sets the level at which it can be exercised. You track the expiry date to avoid unwanted settlement, forced closure, or the loss of rights attached to the contract.
Expiry date Example
You buy a call option with a USD 50 strike price and an expiry date of 30 June.
If the stock trades above USD 50 before expiry, the option can have value.
If 30 June arrives and you have not exercised or closed the option, it expires under the contract rules.
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