Expiration Date

In derivatives markets, the expiration date is the date that a security with a finite life, such as a futures or option contract, expires. With a futures contract, either cash settlement or physical delivery occurs after the expiration date. With an options contract, if the option is not exercised by the end of the day on the expiration date, the option expires worthless. If more than one type of derivative contract class expires on the same expiration date, then that date is said to be a double witching day, or triple witching day. For instance index options, stock options, and index futures all have an expiration date of the third Friday in March, June, September, and December. The concurrent expiration date makes those four days triple witching days. The term expiration date is very basic and used in many contexts. For example, an insurance policy may have a specific expiration date upon which the policy may terminate.

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