What is expiry date
An expiry date is the last day a derivative contract, such as an option or a futures contract, exists. After that day the contract stops trading and is settled or becomes worthless.
A derivative is a contract whose value comes from another asset, such as gold, an index or a currency.
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Formal definition and edge cases
In contract specifications, the expiry date (also "expiration date" or "maturity") is the date on which the holder's rights and obligations under the contract end. It is fixed by the exchange or by the contract terms.
Experienced traders should keep these details in mind:
- Last trading day vs expiry date. On many exchanges trading stops before the formal expiry. Settlement can also happen after it. Read all of these dates in the contract specification.
- Expiry time and time zone. Expiry happens at a set time in the exchange's time zone, not at midnight in Pakistan.
- Holidays. If the scheduled date falls on an exchange holiday, the exchange moves it according to its rules.
- Settlement method. At expiry a contract is settled either in cash or by delivery of the asset. See cash vs physical settlement.
- Instruments with no expiry. Spot forex and many rolling CFDs have no expiry date. Instead, positions held overnight are charged or credited a swap. See swap fees.
Futures expiry
Futures contracts expire on a calendar set by the exchange. The contract nearest to expiry is the front month.
Traders who want to keep a position open past expiry close the expiring contract and open the next one. This is called a futures roll. The price gap between the contracts reflects contango or backwardation.
Options expiry date
An option gives the right, but not the obligation, to buy or sell an asset at a set price (the strike) until or on the expiry date. A call option is the right to buy.
As expiry gets closer, the time value of an option shrinks. Its delta also moves faster when the price is near the strike.
Worked example (hypothetical)
A trader holds a call option on a gold futures contract, with strike price S.
- If gold trades above S at expiry, the option is "in the money". It is exercised or settled for the difference between the market price and S.
- If gold trades below S at expiry, the option expires worthless. The trader loses the full premium paid.
Either way, the contract ends on the expiry date. Nothing carries over unless the trader opens a new position.
Where you see the term
- MetaTrader contract specification. For futures-based symbols, the specification window can show start and expiration dates.
- Pending orders. In MetaTrader, "expiration" can also mean the time when an unfilled pending order is cancelled. This is a different use of the word from contract expiry. Compare day order.
- News. Market reports mention "options expiry" or "futures expiry" when large open positions end. These dates can bring higher volume and sharp price moves.
Leveraged trading in derivatives and CFDs can lose money fast, and price moves near expiry can make this worse.
Related terms
Frequent questions
What does expiry date mean in simple words?
It is the last day a derivative contract is valid. After it, the contract is settled or ends.
Does forex have an expiry date?
Spot forex has no expiry. Positions held overnight carry a swap instead. Currency futures and options do expire.
What happens to an option at expiry?
It is exercised or settled if it is in the money. If it is out of the money, it expires worthless.
Is the last trading day the same as the expiry date?
Not always. Check the contract specification for the exact dates and times.
What is futures expiry in the news?
It refers to the date when a batch of futures contracts ends. Trading activity and volatility can change around that date.