The third-Friday contract that has been listed on US options since the beginning; usually the deepest and tightest line on the chain.
Standard monthlies expire on the third Friday of the month. They are the reference expirations for leaps, for most open-interest statistics, and for index am-settlement.
They matter for execution. Because institutional hedging clusters there, the monthly line often has several times the open-interest and a narrower bid-ask-spread than the weekly two days either side of it.
Example: XYZ at $50. The 20 March monthly $50 call quotes 2.05 / 2.10. The 27 March weekly $50 call quotes 2.10 / 2.35. On a ten-lot round trip that 25-cent-wide weekly market costs roughly $250 more in spread-width than the monthly, for essentially the same exposure.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.Buying a call: payoff at expiry. A 105-strike call bought for 3 loses that whole 3 if the price finishes at or below 105, breaks even at 108, then gains a dollar for every dollar higher. The loss is capped at the premium; the upside is not capped.
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