Expiry

Expiry is the date and time a futures or options contract ends, gets settled and stops existing. After it, positions in that contract are closed.

How it works

Dated futures and options have an expiry: weekly, monthly or quarterly contracts. Quarterly contracts on many venues expire on the last Friday of March, June, September and December, but the exact time differs by exchange and is listed in the contract specifications.

Settlement usually uses an average of the index price over a short window before expiry, not a single trade, to make the price harder to push. Cash-settled futures are closed in money at that price, in-the-money options are exercised, and out-of-the-money options expire worthless.

Large options expiries can bring extra volatility as traders close or roll positions. Perpetual futures have no expiry.

Example with numbers

You are long a quarterly future on 0.5 BTC bought at $62,000. At expiry the settlement price (the averaged index) is $64,000. The position closes automatically, and you receive 0.5 × $2,000 = $1,000 profit minus the settlement fee.

Common mistake

The mistake is forgetting the expiry date and discovering the position was closed automatically at the settlement price, or that an option expired worthless. Mark expiry dates in advance and decide whether to close, roll to the next contract or let it settle.

Questions and answers

What is expiry in simple terms?

It is when a contract's term runs out. A future is settled at the final price, and an option is exercised or expires worthless.

What happens to my position on expiry day?

If you do not close it yourself, the exchange settles it at the settlement price and closes it. The profit or loss is credited to your account.

Does options expiry affect the BTC price?

Volatility sometimes rises around big expiries, but there is no reliable direct link. Do not build trades on that alone.

Expiry

How it works

Questions and answers

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