Learn how and when to remove this template message In finance, the expiration date of an option contract represented by Greek letter tau is the last date on which the holder of the option may exercise it according to its terms.
In the case of options with "automatic exercise" the net value of the option is credited to the long and debited to the short position holders. Typically, exchange-traded option contracts expire according to a pre-determined calendar. For instance, for U. The clearing firm may automatically exercise by exception any option that is in the money at expiration to preserve its value for the holder of the option and at the same time, benefit from the commission fees collected from the account holder.
However the holder or the holder's broker may request that the options are not exercised automatically. Out of the money options are not exercised automatically.
Upon expiration any margin charged held by the clearing firm of the holder or writer of the option is released back to the free balance of the trader's account.