Expiration — the Clock That Changes Everything

What expiration does

Options are wasting assets: at expiration, time value is zero and the option is worth only intrinsic value (or nothing). Every option position is a bet with a DEADLINE — the stock can be "right" eventually and the option still expire worthless. This is the core difference from stock: stocks forgive timing errors; options punish them.

Weekly vs monthly vs LEAPS

Weeklies (7 DTE): maximum theta, lottery dynamics — trading tools. Monthlies (30–45 DTE): the standard cycle — enough time for a thesis, manageable decay. LEAPS (1yr+): mostly-intrinsic stock substitutes with defined risk. The matching rule: option duration should match THESIS duration — a 6-month thesis bought as a 1-week option is a structural contradiction.

Exercise vs sell

Almost never exercise early: selling captures remaining time value; exercising throws it away (early exercise is only rational for deep-ITM puts near dividends). At expiration, ITM options auto-exercise at most brokers — a surprise assignment (or surprise share purchase) is a classic beginner accident. Know your broker's auto-exercise threshold and close or roll positions BEFORE the final week unless assignment is the plan.

Sources

• Options AssignmentInvestopedia
• Option Volatility & PricingSheldon Natenberg