Expiration dates for options of a single underlying stock are offered on a predictable cycle. Every stock with listed options can be identified by the cycle to which it belongs, and these remain unchanged. There are three annual cycles:
1.January, April, July, and October (JAJO).
2.February, May, August, and November (FMAN).
3.March, June, September, and December (MJSD).
In addition to these fixed expiration cycle dates, active options are available for expiration in the upcoming month. For example, let’s suppose that a particular stock has options expiring in the cycle month of April. In February, you may be able to trade in short-term options expiring in March (even though that is not a part of the normal cyclical expiration).
Tip: Some options traders use short-term options as speculative devices. Because they come and go more rapidly than the cyclical options, they often are overlooked as opportunities. For example, they can be used to temporarily protect longer-term short option positions.
An option’s expiration takes place on the third Saturday of the expiration month. An order to close an open position has to be placed...
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