The OCC has set the following rules for stock and narrow based index options expiration and exercise:

  • Options cease trading at 4:00 PM EST (3:00 PM CST) on the third Friday Prior to expiration.
  • Option holders who wish to exercise their options must do so by 5:30 PM EST (4:30 PM CST), the third Friday prior to expiration.
  • All options expire at 11:59 PM EST (10:59 PM CST) on the Saturday following the third Friday.
  • All options held by public customers will automatically be exercised if they are 1 cent in the money
  • All options held by broker dealers will automatically be exercised if they are 1 cent in the money

The OCC has set the following rules for broad based option expiration and exercise:

  • Options cease trading at 4:15 PM EST (3:15 PM CST) on the third Friday prior to expiration.
  • Option holders who wish to exercise their options must do so by 5:30 PM EST (4:30 PM CST) the third Friday prior to expiration.
  • All options expire at 11:59 PM EST (10:59 PM CST) on the Saturday following the third Friday.

Need Help Passing Your Series 4 Exam?

American Vs. European Exercise

Related Articles
  1. Trading

    Should an Investor Hold or Exercise an Option?

    There are times when a trader or investor shouldn't exercise an option. Find out when to hold and why you shouldn't exercise an option.
  2. Trading

    American Vs. European Options

    American- and European-style options have similar characteristics but the differences are important to learn.
  3. Trading

    Do Option Sellers Have a Trading Edge?

    Take a look at a study that discovered that three out of every four options expired worthless.
  4. Trading

    Dividends, Interest Rates and Their Effect on Stock Options

    Learn how analyzing dividends and interest rates is crucial to knowing when to exercise early.
  5. Trading

    Options Strategies for Your Portfolio to Make Money Regularly

    Discover the option-writing strategies that can deliver consistent income, including the use of put options instead of limit orders, and maximizing premiums.
  6. Trading

    Beginner's Guide To Call Buying

    This article focuses on the technique of buying calls and then selling or exercising them for a profit. Learn how to buy calls today.
  7. Investing

    Why Options Trading Is Not for the Faint of Heart

    Trading options is not easy and should only be done under the guidance of a professional.
  8. Trading

    How to Make Money by Trading Index Options

    Index options are less volatile and more liquid than regular options. Understand how to trade index options with this simple introduction.
Trading Center