The expiration date is the final date by which an options contract can be exercised. After this date, the contract becomes void and has no value.
For example, if an option’s expiration date is July 30, 2025, the holder must decide to either exercise it, close the position, or let it expire by that date. After expiration, the contract cannot be traded or exercised.
Most options expire on the third Friday of the expiration month (for standard U.S. equity options). However, weekly and quarterly options also exist, providing more flexibility for traders.
Understanding expiration is critical because time decay (theta) accelerates as the expiration date approaches, especially during the final 30 days.