The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “What happens when options expire?” Options expiration can sometimes be a little bit confusing for people, especially if you're new to options trading. Even if you've been trading for a little while and you haven't yet come upon an options expiration where you have to deal with contracts that are either in the money or out of the money, it can sometimes lead investors to kind of roll their eyes and wonder what's going to happen. When options expire, there's only two things that could potentially happen. Either your option contract is out of the money or your option contract is in the money. If your option contract is out of the money, then the option contract simply expires worthless. And so, whether you are shorting that contract or you’re long that contract, if the contract ends the expiration period out of the money, then the contract expires worthless and there's nothing t