Series 7 Exam Question 397: Answer and Explanation

Question: 397

An investor purchases 1 TUV Sep 30 call for a premium of 4. This option will expire

• A. on the third Saturday in September
• B. on the third Friday in September
• C. on the Saturday following the third Friday in September
• D. on a date to be assigned by the CBOE

Correct Answer: B

Explanation:

B. Listed options expire at 11:59 p.m. EST (10:59 p.m. CST) on the third Friday of the expiration month. The last time to trade an option is 4:00 p.m. EST (3:00 p.m. CST) on the third Friday of the expiration month. The last time to exercise an option is 5:30 p.m. EST (4:30 p.m. CST) on the third Friday of the expiration month.