Option expiry date

Expiry is a contract attribute, not another name for the option itself. Exercise rights before or at expiry depend on style and terms, and trading or settlement cutoffs can differ. European-style options normally permit exercise at expiry, while American-style options permit it during the specified period. The hedge’s cash need may not coincide exactly with the option date, creating timing exposure. Identify contract units, exercise procedures and settlement conventions rather than assume that being profitable on paper automatically results in the intended payment or receipt.