Expiration month

Expiration Month - The month in which an option expires.
Exposure - The total amount of money loaned to a borrower or country. Banks set rules to prevent overexposure to any single borrower.

Expiration Month
The month when an option or futures contract expires.
Ex-Rights Date
The date after which stocks are traded without subscription rights.

The expiration month code tells us, in a single letter, when the option expires and whether it's a call or a put. The letters "A" through "L" are assigned to call option, with "A" denoting a January expiry, "B" denoting February expiry, and so on.

For each expiration month, options are listed having several strike prices. For example, assume that it is now November and that we are interested in corn options that expire the following March.

Cycle Available Expiration Months
January
January, April, July, October
February ...

Front Month: The first expiration month in a series of months.
Front-Loaded: Commission and fees taken out of investment capital prior to beginning work.

Spreads can be for the same expiration month but different strikes, called a vertical spread, for the same strike price but different months, called a horizontal or calendar spread, ...

A new futures contract expiration month is opened for trading. Currently, no one has bought or sold a futures contract.
A trader (Trader #1) buys a futures contract, but in order for this to happen, someone has to sell that trader the future.

Because prices can become particularly volatile during the expiration month (also called the "delivery" or "spot" month), persons lacking experience in futures trading may wish to liquidate their positions prior to that time.

The Expiration Date entry box has a convenient menu of upcoming contracts to choose from or you can enter the expiration month and year in dd/mm/yy (e.g. 3/15/07) or mmm yyyy (e.g. Jun 2007) format.

To make a long straddle position, a trader has to buy a call option and put option with the same strike price, on the same expiration month.

Condor: A non-directional option strategy that uses either 4 calls or 4 puts of the same expiration month. It uses 4 different strike prices and the maximum profit occurs between the center 2 strike prices.

A quadratic curve fit is made between the IV values and the strike prices for all the call options for a stock for a given expiration month. Likewise a curve fit is done for the puts.

Front Month: The first expiration month in a series of months.
Give Up: An order that, at the request of the customer, is credited to a brokerage house that has not performed the execution service.

Selecting the option expiration month is an important part of any option strategy because it can affect your trade's success or failure.
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Optionable underlyings have more than one expiration month. For example, at the time of writing, MSFT have electronic tradable options that expire January 2012.
Anyway, the graphs are just for illustration purposes.
venkat ...

Stock options expire by the close of business on the 3rd Friday of each expiration month and each stock has a corresponding cycle of months that they offer options in.

Option cycle
The cycle of option expiration months. The most common cycles are: January, April, July, and October (JAJO); February, May, August, and November (FMAN); and March, June, September, and December (MJSD).

Buying and selling puts or calls of the same expiration month but having different strike prices.
Volatility
A measurement of the change in price over a given time period.

In futures and options, the longest settlement or expiration month of a currently traded contract.
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We stated earlier that an at-the-money option has more extrinsic value than any other option in its expiration month. This is due to a number of contributing factors including time but it is in no small way due to volatility.

Options cease trading on the third Friday of their expiration month and expire at 11:59AM Central Time on the Saturday after the third Friday of ...
Out of the Money ...

Either long or short, both a Put and a Call, with the same strike price and the same expiration month.
Subordinated Debenture
A bond having a claim on assets only after the senior debt has been paid off in the event of liquidation.

CME lists twelve consecutive monthly LIBOR futures at any given time, but most trading occurs in the expiration months that correspond with the quarterly expirations of CME Eurodollars - March, June, September and December.

The options are traded for the same expiration month, with different strike prices and are either both call options or both put options. You sell the more expensive option, and buy the cheaper option, resulting in a credit to your account.

Last Trading Day - The third Friday of the expiration month. Options cease trading at 3:00 PM Eastern Time on the last trading day.

Vertical Spread: Buying and selling puts or calls of the same expiration month but different strike prices.

The investor will buy put options that currently have a higher strike price, while selling the same number of stocks that have a lower current put price that have the same expiration month as the stocks that were sold.

Term Structure - The price curve formed by the prices of futures contracts over various expiration months. Read more about Futures Term Structure.
Tick - A minimum change in price in either direction. Read All About Minimum Tick.

The expiration date for listed stock options is the Saturday after the third Friday of the expiration month. Holders of options should indicate their desire to exercise, if they wish to do so, by this date.

Back Month The out, or back, contract month, as opposed to the current contract month; the expiration month farther in the future than the current, or spot, month.

For stock options, this date is the Saturday immediately following the 3d Friday of the expiration month; however, brokerage firms may set an earlier deadline for notification of an option holder's intention to exercise.

The price difference between three-month futures contracts for U.S. Treasuries and three-month contracts for Eurodollars having identical expiration months.
Tender
1. To accept a formal offer, such as a takeover bid or tender offer.

Diagonal spread: An options spread position in which both the strike prices and the expiration months differ.
Dilution: Reduction of the percentage ownership of the existing shareholders through the sale of more stock by the corporation.

Option series
A number of options on the same underlying stock that have the same strike price and expiration month.
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(An out-of-the-money call is a call option with a strike price higher than the current price of the underlying shares.) You should almost never sell the current expiration month because options prices decline as they get closer to expiration and you ...

Straddle: Refers to the simultaneous purchase or sale of both a call and a put with the same expiration month and with the same strike price.

The difference between the price of the three-month US Treasury Bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month.
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Tax Put ...

Vertical Spread - Buying and selling commodity futures puts or calls of the same expiration month but different strike prices.

Options give their owners the right to buy or sell a stock within a set period of time, at the end of which the option contract expires. In the United States, all stock options expire on the third Friday of their expiration months.
fairly valued ...

Price spread
An options strategy that involves buying and selling two options on the same security with the same expiration month, but with different exercise prices.

For European-style options this would be the only day on which the option can be exercised. This is normally the third Friday of an options expiration month, but if Friday happens to be a holiday, ...

Treasury bills and three-month LIBOR; (2) traditionally, the difference between the price of the three-month U.S. Treasury bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month ...

Expiration Month : The month in which an option expires.
Expiry Date : The last date on which an option can be bought or sold.
Exponentially smoothed moving average : A moving average that also takes ...
Exposure : see Position and Mismatch.

a minor that is managed by an adult as the custodian and restricted by the rules associated with corresponding IRA account. See also Traditional IRA and Roth IRA. Customer Segregated Funds See Segregated Account. Cycle The expiration months ...

See also: Expiration, Option, Contract, Trading, Future