Definition of 'Expiration Cycle'
The calendar cycle of expiration months that is assigned to basic exchange-traded stock options. With a few exceptions (some options will have contracts in every month), most equity options are set up to trade with expiration months in one of the following three formats:
January Cycle: Expirations in January, April, July, October (the first month of each quarter)
February Cycle: Expirations in February, May, August, November (second month)
March Cycle: Expirations in March, June, September, December (third month)
Investopedia explains 'Expiration Cycle'
Some options may have contracts in every month of the year, but this is usually reserved for highly liquid underlying securities, such as ETFs on the S&P 500. Options such as these are often used to hedge a portfolio and, because they represent a basket of stocks, the security is more stable. The strike prices tend to hold up better as a result.
With single stock options, a given strike price that once seemed valuable can quickly become obsolete, such as a $25 strike price in a call option on a stock that drops suddenly from $27 to $15 over the course of a month.
LEAPS are not subject to standard expiration cycles because they are derivative contracts that are one year or more away from expiration.