The last day an option can be exercised; after it the contract ceases to exist.
US equity options expire on Fridays: monthly on the third Friday, and weekly for most liquid names. Index products such as SPX now list expirations every trading day, which is where zero-dte comes from.
Time to expiration drives theta and extrinsic-value. Longer-dated options (leaps) decay slowly; short-dated ones decay fast.
Example: on a Monday, a call expiring Friday has four trading days of life. If the stock does not move, most of its remaining extrinsic value will be gone by Thursday afternoon.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Time decay of an option's value. The part of an option's price that is only time — its extrinsic value — drains away every day and must reach zero at expiry. The slide is gentle months out and steepest in the final weeks, which is what traders call theta.
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