Futures & options
What is Expiry?
Also called: Expiry day, Weekly expiry
Hinglish mein padhein: F&O mein expiry kya hoti hai?
Expiry is the last day an F&O contract trades. After that, open contracts are settled and cease to exist.
Stock F&O contracts expire monthly. SEBI has limited each exchange to one weekly index expiry to curb speculative excess.
Option premiums lose time value fastest in the last days before expiry.
Related terms
- FuturesA futures contract is an agreement to buy or sell an asset at a set price on a future date. Both sides are obliged to settle.
- Options (call and put)An option gives the buyer the right, but not the obligation, to buy (call) or sell (put) at a strike price before expiry. The seller takes the obligation.
- Option premiumThe premium is the price of an option. It is made of intrinsic value (how much it is in the money) plus time value.