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The options trader makes a profit of $200, or the $400 option value (100 shares * 1 contract * $4 value at expiration) minus the $200 premium paid for the call.
The simultaneous expirations generally increases the trading volume of options, futures, and their underlying stocks, occasionally increasing the volatility of prices of related securities. On those same days single-stock futures also expire, so that the final hour is sometimes referred to as the quadruple witching hour.
In finance, the expiration date of an option contract (represented by Greek letter tau, τ) is the last date on which the holder of the option may exercise it according to its terms. [1] In the case of options with "automatic exercise", the net value of the option is credited to the long and debited to the short position holders.
The IMM dates are the four quarterly dates of each year which certain money market and Foreign Exchange futures contracts and option contracts use as their scheduled maturity date or termination date. The dates are the third Wednesday of March, June, September and December (i.e., between the 15th and 21st, whichever such day is a Wednesday).
Options expiration, yields creating ripples in the market. October 20, 2022 at 9:56 AM ...
When to use it: A bear put spread is an effective strategy when the stock is anticipated to fall by the options’ expiration. It can work if the stock is expected to fall significantly but can ...
When an option is exercised, the cost to the option holder is the strike price of the asset acquired plus the premium, if any, paid to the issuer. If the option's expiration date passes without the option being exercised, the option expires, and the holder forfeits the premium paid to the issuer.
The option style, as specified in the contract, determines when, how, and under what circumstances, the option holder may exercise it. It is at the discretion of the owner whether (and in some circumstances when) to exercise it. European – European-style option contracts may only be exercised at the option's expiration date. Thus they can ...