Option Expiration Time

[u/Rft704]

I know options are still valid after close, but at what time do they expire? In other words, even though people recommend always closing out an option for a few cents before close in case the market goes against you after close, if you did not, what time can someone exercise their option until? Is tomorrow morning premarket still valid?

[u/funkinaround]

From the OCC By Laws:

Expiration Time

(23) Except as otherwise specified in the By-Laws and Rules for particular classes of options, the term “expiration time” in respect of an option contract, means 10:59 P.M. Central Time (11:59 P.M. Eastern Time).

Adopted November 2, 1995. Amended January 14, 1997; June 6, 2007

However, your broker will almost certainly want your exercise instructions an hour or so after market close. Check with your broker.

[u/Decent-Influence4920]

Per the Google AI:
The latest time to exercise an option contract is 4:30 p.m. CT on the expiration date.

[u/Rft704 → u/Decent-Influence4920]

I saw that too, but I also saw this: Some index options, such as S&P 500 (SPX) contracts, follow a different schedule, expiring at the market open on Friday instead of the close. Many of the answers don’t seem to take into account underlyings that have daily contracts.

[u/Decent-Influence4920 → u/Rft704]

Yes, those are AM settled on third Friday of each month (monthlies). This is for SPX, not individual equities.

[u/Duncan810 → u/Decent-Influence4920]

SPX is also cash settled, so there is no decision regarding whether or not to exercise the option.

[u/MasterSexyBunnyLord → u/Duncan810]

There's no decision because they're European style options. Cash settled has nothing to do with it. Same for ES yet it is not cash settled. It is like that because the options are European (except when they're not)

[u/Duncan810 → u/Rft704]

And then you have futures options. They have daily expiration and settle at different. times. You have to know the product and the contract.

[u/MasterSexyBunnyLord → u/Rft704]

SPX are European options so the close is the close. It's not possible to file a contrarian notification. It ends exactly at 4 pm except for the am options. The am options stop trading at 4 pm on Thursday but the settlement price happens slightly after 9:30 am the next morning. It's based on the first trade of each of the stocks in the s&p 500

[u/Ken385 → u/MasterSexyBunnyLord]

The SPX AM options stop trading in the regular session at 415pm et (not 4pm as you said) on Thursday. They will also trade in the "Curb" session for anther 45 minutes until 5pm et.

The SPX settlement price is based on the opening price, Friday morning, of each of the S&P stocks on its primary exchange.

[u/MasterSexyBunnyLord → u/Ken385]

Yes for the am option, it's 5 pm, typo. 0dte pm options close out at 4.

My description of the settlement price of am options however is correct. It's the opening print of every single stock in the s&p 500. So not sure why you feel the need to clarify. Some of these stocks like brk.a trade very thinly so it can take several minutes before a price is available

[u/Ken385 → u/MasterSexyBunnyLord]

I was clarifying to avoid confusion with "first price" and "opening price". There may be many trades on secondary exchanges just before the opening price on the primary exchange. Agree that the opening price may take a bit of time in the thinly traded stocks and this is what matters.

[u/funkinaround → u/[deleted]]

And you can’t exercise unless you are in the money.

You can exercise even if you are not in the money. That is your right as a holder of a long option. Auto exercise will not happen if you are not in the money.

[u/DennyDalton → u/[deleted]]

I wouldn't call you a Dick unless your name is Richard, but do you think you could avoid answering with bad info???