Expiration Saturday Soon to be Gone

Standard Monthly Option Expiration Move from Saturday to Friday

 For years (actually 40) we have been telling investors that options expire on the Saturday following the 3rd Friday of the month.  A while ago we added several Quarterly’s options and as you know have Weekly’s on many products.  Quarterly’s and Weekly’s expire on those last days they trade. (for example, the April Weekly’s that cease to trade on Friday April 26th will expire on that Friday the 26th, not Saturday the 27th). The only products with Saturday expiration are the standard – 3rd Friday of the month options.  That’s soon to change.

The Options Clearing Corporation (OCC) is pursuing the transition of standard option monthly expiration processing from Saturday morning to Friday evening. As result, the expiration date for standard monthly options will be changing from the Saturday following the third Friday of the month to the third Friday of the month.

 There is a cut-over date of February 1, 2015. Currently, it is anticipated that all standard monthly options that expire prior to February 1, 2015 will have a Saturday expiration date and all standard monthly options that expire on or after February 1, 2015 will have a Friday expiration date. The anticipated February 1, 2015 cut-over date will not impact existing standard monthly options, including FLEX contracts.

 The CBOE is preparing their systems to accommodate the listing of equity and index options that have a Friday expiration date by August 31, 2013. CBOE and C2 are working with your brokerage firm to make sure everything runs smoothly.

OK, what does this mean for you?  Not much.  On your brokers site, currently you might see a December Standard Options expiring on Saturday December 21st.  That won’t change.  But, for example, if June of 2014 options are added in September (’13), June expiration will be on Friday June 20th, not Saturday June 21st.  So don’t be confused

CBOE Regulatory Circular RG12-135 pretty much has the same info that we are posting here.  OCC Memo # 31174 has similar.

  • beidaren

    what took it so long?

    • Good question. For years there were hand written trades that needed to be entered into the system. When electronic orders became the norm, including our floor where market makers used hand-held computers, almost all trades
      unofficially “matched up” as the trade happened. I think it wasn’t a priority to change (including rule filings with other regulators) until products like Weekly’s came in.