Expiration
Expiration is the date and time after which an option contract is no longer valid and any remaining time value is gone.
At expiration an option is worth only its intrinsic value: in-the-money options are exercised or settled, and out-of-the-money options expire worthless. Standard US equity options expire on the third Friday of the month.
The closer expiration gets, the faster an option loses time value (theta decay), so expiration date is a central choice in any options trade.
Example. A 100-strike call with the stock at $104 at expiration is worth exactly $4.00; if the stock were at $99, it would expire worthless.
FAQ
What happens to options at expiration?
In-the-money options are automatically exercised by the OCC (typically if $0.01 or more ITM); out-of-the-money options expire worthless.
When do US stock options expire?
Standard monthly equity options expire on the third Friday of the month; weeklys and other cycles also trade.