DaytradeTeam Brainzzzz
Trading Tips and Strategies from Traders at DaytradeTeam
Sunday, October 30, 2005
Options Trading Term: Expiration
Expiration date in options trading is defined as "The day on which an options contract is no longer valid and, therefore, ceases to exist."
Notes:
The expiration date for all listed stock options in the U.S. is the third Friday of the expiration month (except when it falls on a holiday, in which case it is on Thursday). For example, if you are looking at the November options on a stock, you should realize that they will expire on November 18, because that is the third Friday of November.
Typically, Option Trading is most profitable when you establish net-debit positions such as single call options or put options or straddles and strangles that have expiration dates 4+ months away from the current date. You should also try to establish net-credit positions such as iron condors and vertical credit spreads that expire within 40 or so days.
The Max Pain theory holds that options expiration dates effect the stock price of the underlying security.
Notes:
The expiration date for all listed stock options in the U.S. is the third Friday of the expiration month (except when it falls on a holiday, in which case it is on Thursday). For example, if you are looking at the November options on a stock, you should realize that they will expire on November 18, because that is the third Friday of November.
Typically, Option Trading is most profitable when you establish net-debit positions such as single call options or put options or straddles and strangles that have expiration dates 4+ months away from the current date. You should also try to establish net-credit positions such as iron condors and vertical credit spreads that expire within 40 or so days.
The Max Pain theory holds that options expiration dates effect the stock price of the underlying security.
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