An expiration date in derivatives is the last day that an options or futures contract is valid. When investors buy options, the contracts give them the right, but not the obligation, to buy or sell the assets at a predetermined price, known as the strike price.

What happens when buy option expires?

If the option expires profitable or in the money, the option will be exercised. If the option expires unprofitable or out of the money, nothing happens, and the money paid for the option is lost. ... Conversely, a put option's premium declines or loses value when the stock price rises.

What is option expire date?

In finance, the expiration date of an option contract (represented by Greek letter tau) is the last date on which the holder of the option may exercise it according to its terms.