When do options stop trading

This time difference is not a problem when the underlying security also closes for trading at the same time. However, if the underlying security does trade beyond the close of trading for the option, both buyers and sellers might find that the exercise of their contract is automatic if they were ITM.

Conversely, they may expect the automatic exercise, but after-hours trading in the underlying asset may push them OTM. Rules covering these possibilities, especially at what time the final price of the underlying is recorded, can change. So, traders should check with both the exchange where their options trade, as well as the brokerage handling their account.

As with other afternoon-settled index options, the exercise-settlement value is calculated using the last closing reported sales price in the primary market of each component stock. Advanced Options Trading Concepts.

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I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. What Is Expiration Time? Key Takeaways The expiration time is the precise date and time at which derivatives contracts cease to trade and any obligations or rights come due or expire. Typically, the last day to trade an option is the third Friday of the expiration month. Derivative contracts will specify the exact expiration date and time.

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This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. The last trading day is the final day that a contract may trade or be closed out before the delivery of the underlying asset or cash settlement must occur. Triple Witching Definition Triple witching is the quarterly expiration of stock options, stock index futures, and stock index options contracts all on the same day.

Automatic Exercise Definition Automatic exercise is a procedure where the Option Clearing Corporation will automatically exercise an "in the money" option for the holder. What Is Quadruple Witching? Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously.

Witching Hour Definition The witching hour is the final hour of trading on the days that options and futures expire. Expiration Date Derivatives Definition The expiration date of a derivative is the last day that an options or futures contract is valid. Partner Links. Options exchanges have looked into extending trading hours, but found there's not enough trading volume to justify the cost, he says.

There are some exceptions. ET to p. The VIX is an index that rises and falls along with investors' anxiety about markets. Facebook Twitter Email. Ask Matt: Trading stock options in after hours. Share your feedback to help improve our site!