At any time, options on a particular stock will
be available with at least four different expiration months.
Options are always available for the current month
and the following one. So on January 1, you can buy or sell options
that expire in January and in February on all stocks with listed
options. On February 1, you can buy or sell options expiring in
February and March for all those stocks — and so on through
the year.
The two other months in which options on a specific
stock expire are determined by the expiration cycle to which the
underlying stock is assigned. There are three cycles, beginning
in January, February, and March, each including four months, one
in each calendar quarter. Stocks are assigned randomly to one
of those cycles.
Cycle
1 (January)
January
April
July
October
Cycle
2
(February)
February
May
August
November
Cycle
3
(March)
March
June
September
December
So, on January 1, options on a stock assigned to
the January cycle would have expiration dates in April and July,
the next two months in the cycle, as well as in January and February.
Those on a stock assigned to the February cycle would have expiration
dates in May and August in addition to January and February. Stocks
assigned to the March cycle would have options expiring in June
and September.
The current month's options expire on the
Saturday after the third Friday, and a new options series with
a new expiration is added on the following Monday. If, for example,
January 20 were a Monday, new options series expiring in March
would be added to the January and February cycles and a new series
expiring in September would be added for stocks in the March cycle.
