Options Expiration Explained

Options expiration is the last trading day an option can be exercised or assigned. This video explains options expiration and the probability of early assignment.
Options Expiration Explained
Kirk Du Plessis
Apr 19, 2021

Unlike traditional stock investing, all options contracts have a limited lifespan and a definitive "end date" or “expiration date” at which point they become worthless or are exercised. We'll talk briefly about the 2 major types of option styles: American-Style and European-Style contracts, as well as some major expiration cycles to consider. It's also important to know that less than 10% of options are ever exercised during the month. And of those roughly 10% that are, they are typically exercised in the last week of expiration. This means you have very little risk of being assigned on a short option throughout the month.

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What is the Options Clearing Corporation (OCC)?
The Options Clearing Corporation (OCC) is responsible for listing all options and controls the exercise and assignment process. The OCC provides a liquid market for traders and guarantees all options transactions.

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