DEFINITION of 'Expiration Date'

The date after which a consumable product such as food or medicine should not be used because it may be spoiled, damaged or ineffective. Expiration dates are especially important in the case of medications, since the expiration date provides the only indication about whether the product can still be safely used, unlike food items where there is often visible indication that its “best by” date has passed. As using expired medical products is risky and may be harmful to health, the FDA mandated specifying expiration dates on all prescription and over-the-counter medicines in the late 1970s. Also called “expiry date.”

BREAKING DOWN 'Expiration Date'

Expiration dates for medicines are often marked “EXP” and can be found printed on the label or stamped on to the medicine bottle or carton.

Expired medicines can be rendered less effective or made more risky due to a change in chemical composition. Since chemical compounds may have decreased potency over a period of time, it is important to adhere to expiry dates. Taking an expired medication that is less effective may have serious consequences because it may not be able to control the underlying condition as well as an unexpired medication would.

In some cases, the FDA may extend the expiry date of a medication if there is a shortage of it. The extended expiration date is based on stability data for the medication that has been reviewed by the FDA.

Expired medication should be disposed of in a proper manner, rather than being dumped straight in the trash. If no disposal instructions are provided for an expired drug, consumer should check for drug take-back programs in their state or municipality. In the absence of specific instructions or take-back programs, U.S. federal guidelines recommend disposing of expired or unwanted medicines by putting them in a bag or container and mixing up with coffee grounds or kitty litter. A small number of medicines that can be fatal to children or pets with even one dose are permitted to be flushed down the sink or toilet if they expire or are no longer needed.

RELATED TERMS
  1. Expiration Time

    A specified time, after which the options contract is no longer ...
  2. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
  3. Front Month

    Front month refers to the futures contract in each market with ...
  4. Expiration Cycle

    The calendar cycle of expiration months that is assigned to basic ...
  5. Deferred Payment Option

    An option with all the characteristics of an American vanilla ...
  6. Pegging

    Pegging is a method of holding a currency exchange rate steady ...
Related Articles
  1. 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.
  2. Trading

    Stock Option Expiration Cycles

    Understanding expiration cycles is just one more way to help you increase your success rate when trading options.
  3. Insights

    Pharmaceutical Sector: Does The FDA Help Or Harm?

    We look at how the FDA affects the pharmaceutical industry, and how investors can avoid the pitfalls.
  4. Investing

    Try Southwest Airlines Options To Avoid Risks

    Learn how to take a position in Southwest Airlines' stock using option strategies that have limited or defined risk.
  5. Investing

    A Checklist for Medical Technology Investments

    Find an investment that will give your portfolio a shot in the arm.
  6. Trading

    How to Trade Volatility Using Binary Options - Sponsored by Nadex

    Binary options are similar to classic options with some slight nuances but the components used for the option’s pricing are the same; underlying market, strike (K), volatility and time.
  7. Trading

    An Introduction to Weekly Options

    The weeklys are a powerful tool that can create quick profits or quick losses, depending on how you use them.
  8. Trading

    The Basics of Options Profitability

    The adage "know thyself"--and thy risk tolerance, thy underlying, and thy markets--applies to options trading if you want it to do it profitably.
  9. Retirement

    3 Big Medical Costs and How to Protect Against Them

    Without a plan, an unexpected injury or chronic disease will cost you.
RELATED FAQS
  1. When holding an option through expiration date, are you automatically paid any profits, ...

    Holding an option through the expiration date without selling does not automatically guarantee you profits, but it might ... Read Answer >>
  2. Can an option be exercised on the expiration date?

    The use of options has increased dramatically over the years as a way to profit from or hedge against the volatile movements ... Read Answer >>
  3. What does it mean to roll a derivative contract?

    Find out more about derivative securities, how to roll forward a derivative contract and what it means when a derivative ... Read Answer >>
Hot Definitions
  1. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  2. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  3. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  4. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  5. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
  6. Price Elasticity of Demand

    Price elasticity of demand is a measure of the change in the quantity demanded or purchased of a product in relation to its ...
Trading Center