Options mechanics
What is the Expiration Date and what happens at the exact minute of equity option settlement?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
The expiration date is the last day an option contract is valid; standard monthly equity options expire on the third Friday with trading ending and settlement processed by OCC the next business day.
How it works
At expiration, in-the-money options by at least $0.01 are typically automatically exercised by OCC's Exercise by Exception process unless the holder submits explicit contrary instructions to their broker.
An example
An XYZ 50 call expiring Friday that closes at 50.20 is automatically exercised, delivering 100 shares per contract to the account on the following settlement day.
Risk & limitations
Holding options into expiration carries pin risk and overnight gap risk from assignment, so confirm your broker's specific cutoff times and auto-exercise thresholds in advance.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.