What It Means
Expiry is the date an options or futures contract stops trading and gets settled, either for a payout if it's in-the-money or worthless if it isn't. Every F&O contract has one built in; there's no such thing as an option that runs forever.
How It Works
In India, index options like Nifty and Bank Nifty typically have weekly expiries, while individual stock options are usually monthly. Exchanges do revise these cycles from time to time, so it's worth checking NSE's current expiry calendar rather than assuming last year's schedule still holds.
As expiry approaches, an option's time value decays faster, since there's less time left for the underlying to move in the buyer's favor. This is why the same strike can look cheap a week before expiry and even cheaper the day before.
Related Terms
- Strike Price — paired with expiry to fully define a contract
- Option Chain — shows OI and pricing for a specific expiry at a time