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What is Strike & Expiration Date?

One key characteristic of an option contract is the agreed upon price, known as the strike price or exercise price.

The strike price is the predetermined price at which you buy (in the case of a call) or you sell (in the case of a put) an underlying futures contract when the option is exercised.

Strike Price Ranges

When trading options you can choose from a range of strike prices that are set at predefined intervals by the exchange. The interval range may vary depending on the underlying futures contract.

While futures can trade at prices in between these intervals, the exchange attempts to set the option strike intervals to meet the market’s need for liquidity and granularity.

Each option product will have a unique price interval rule that is based on the product structure and the needs of the market. Not only will products have varying intervals, but also within certain products, the intervals will change depending on the expiration month.

For example, options on corn futures have an interval of 5 cents for the two front months, of the expiring futures contract and then transition to 10 cent intervals for contracts 3 months and beyond.

The full range of strike prices, for many options products, will be determined by the previous day’s daily settlement price for the futures contract.

Over time the entire range may expand beyond the initial listed boundaries, due to large market movements. In addition, strike intervals can become more granular as options move closer to expiration.

Example Strike Price Range

In our example we are going to look at a fictional contract with a December expiration. At outset of the option contract, the price rule dictates a 10 point interval and a 40 point range. Assume the underlying futures contract is trading around 100 points, the option price range will be set at 80, 90, 100, 110, and 120.

As the price of the underlying futures contract moves, the exchange will monitor and adjust the range of strike prices.

After the first quarter the futures market fell to 83 points, therefore another strike price at 70 was made available.

In the third quarter the futures contract rallied higher. The option contracts are now much closer to expiration and have increasing trading activity. To meet demand, additional strike prices at one point intervals are made available between 80 and 100.

By the last quarter the market continued upward and additional one point intervals were needed between 100 and 110.

Options do not last forever. They expire or terminate; they all have an ending date.

Options are tied to an underlying futures product and all futures products have a settlement date. If the futures contract no longer exists, then clearly an option on that contract can no longer exist either.

When do options expire?

When it comes to options on futures, there may be a variety of option expiration dates you could trade for the same futures contract.

You may find some option expirations align with the expiration of the underlying futures contract. In other cases a futures product could have a variety of shorter term options listed. These shorter term options offer traders greater precision and flexibility to expand their trading strategies.

Expiration Examples

Assume the E-mini S&P 500® futures contract (ES) has a settlement date in June.

Quarterly Options

Quarterly options contracts are offered on the E-mini S&P 500® futures contract. In this case the June quarterly option contract would expire at the same time as the futures contract.

Monthly Options

Monthly contracts are also offered for the same futures product. With a monthly option contract you can express a short term opinion on this longer dated futures contract.

For each listed month, such as May and April, you can trade an option that will expire within a month and settles into the same June ES futures contract.

Weekly Options

If your time horizon is even shorter, there are weekly options on the E-mini S&P 500 futures contract.

A rolling list of five weekly options that expire each Friday is offered on most products. After each weekly front-end contract expires, another back-end weekly is listed.

Physically Delivered Commodity Options

When it comes to physically-delivered commodities, option expirations will expire prior to the futures settlement. This happens so that traders have an opportunity to mitigate delivery of the physical product.

For example, when WTI Crude Oil futures settle in June, the WTI option will have a May expiration date. If the option is exercised into the active futures contract, the trader has time to adjust their futures position to either offset the position or make plans to take delivery.


Options can have a variety of option expiration dates, giving you the flexibility to find a product that meets your trading needs.

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