Definition
Option expiry is the scheduled point in time at which an options contract becomes void and stops trading. At expiry, the contract’s payoff is determined based on the relationship between the underlying asset’s price and the option’s strike price. After this moment, the holder no longer has the contractual right to exercise the option, and the contract either settles with a final value or expires worthless. In crypto markets, option expiry is typically defined to the exact hour and uses standardized calendars set by the exchange or protocol.
The concept of option expiry applies to both a Call Option and a Put Option, regardless of whether they are physically or cash settled. Around expiry, metrics such as Implied Volatility and Open Interest often reflect how market participants are positioned into the final settlement. Once the expiry time is reached, the option’s time value drops to zero and only any remaining intrinsic value is realized. Option expiry is distinct from ongoing derivatives mechanisms such as a Funding Rate, which apply to perpetual contracts rather than expiring options.
Context and Usage
In trading terminology, option expiry is a core parameter specified when an options contract is listed, alongside strike price and contract size. It defines the maximum lifespan of the option and anchors all time-based characteristics, including how quickly its price responds to changes in time remaining. Different markets may offer multiple expiry cycles, such as weekly, monthly, or quarterly dates, each concentrating liquidity and Open Interest at specific points on the calendar.
For both Call Option and Put Option markets, option expiry acts as the final reference point for settlement and risk measurement. As expiry approaches, Implied Volatility and other pricing inputs converge toward realized outcomes, and the distinction between in-the-money and out-of-the-money contracts becomes definitive. In crypto derivatives ecosystems, option expiry times are standardized to ensure transparent settlement and clear separation from perpetual instruments that rely on a Funding Rate instead of a fixed maturity.