Expiry Date
The date on which a derivative contract ceases to exist and is settled.
Formula
Test: the contract's rights and obligations terminate at the close of the stated expiry day, with settlement at the closing reference price
Unit
days
In depth
Expiry converts a position with time value into a position with only intrinsic value, so every option loses its remaining time value on that day regardless of what the underlying does. Indian index options moved to weekly expiries, which compressed the whole life cycle of a contract into days and sharply raised turnover — and SEBI has since restricted the number of weekly expiries per exchange after finding that individual traders were losing heavily. Positions left open at expiry are settled automatically, which for in-the-money single-stock options means physical delivery obligations. A trader who forgets an expiry date discovers it through a settlement obligation rather than a reminder.
Worked example
An out-of-the-money 24,600 call trading at 40 with three days to expiry is worth 40 x 75 = ₹3,000. If the index expires at 24,500, the contract is worth exactly zero and the entire ₹3,000 is lost.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Expiry Date” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.