What Are the Closing Times for Option Trading?
Understand the precise closing times for option trading, covering standard hours, varied option types, and market holiday exceptions.
Understanding the precise closing times for option trading is important for investors. These times dictate when new orders can be placed, existing positions adjusted, or contracts cease trading. Knowing these schedules allows traders to manage risk effectively and execute strategies before market activity concludes. Market hours can vary significantly depending on the type of option being traded.
Standard Option Trading Hours
For most widely traded options, such as those on U.S. equities and exchange-traded funds (ETFs), the standard closing time aligns with the underlying stock market. This means these options typically cease trading at 4:00 p.m. Eastern Time (ET) on weekdays. The New York Stock Exchange (NYSE) and Nasdaq operate from 9:30 a.m. ET to 4:00 p.m. ET, Monday through Friday.
This 4:00 p.m. ET closing time is consistent for most equity and ETF options, mirroring the regular trading session of the broader stock market. This alignment ensures option prices reflect the final trading activity of their underlying assets. For instance, if you hold an option on a company’s stock, its trading window closes when that company’s stock stops trading for the day.
Options that expire on a given day, often a Friday, also stop trading at 4:00 p.m. ET. It is important to note that while the market officially closes, some electronic communication networks (ECNs) might facilitate extended-hours trading for stocks. However, these extended sessions generally do not apply to options, which adhere to regular market hours for their final trading.
Variations in Closing Times
While most equity options close at 4:00 p.m. ET, trading hours can differ for other types of options. Index options, such as those on the S&P 500 Index (SPX) or Nasdaq 100 Index (NDX), often have extended trading hours. For example, some index options may trade until 4:15 p.m. ET or later, and certain broad-based ETF options might also extend to 4:15 p.m. ET.
Some specific index options, including SPX and VIX options, are available for trading nearly 24 hours a day, five days a week, through global trading hours. This extended access allows market participants worldwide to trade or hedge against U.S. market and global equity volatility across different time zones. These products may also have a “Curb session” that extends beyond regular hours, until 4:00 p.m. CT (5:00 p.m. ET), for adjustments.
Futures options, which derive their value from futures contracts on commodities like crude oil or gold, or financial instruments such as interest rates, follow the trading hours of their respective underlying futures markets. These markets often operate for much longer periods than equity markets, with many futures contracts trading almost 24 hours a day, five days a week, from Sunday evening through Friday afternoon Central Time. For instance, crude oil futures and options trade from Sunday 5:00 p.m. to Friday 4:00 p.m. Central Time, with a brief daily break.
Currency options, tied to foreign exchange rates, also exhibit extended trading hours due to the global, decentralized nature of the forex market. The forex market itself operates 24 hours a day, five days a week, opening on Sunday evening and closing on Friday afternoon, allowing continuous trading across various international time zones. Options on currency pairs may also offer significantly longer trading windows compared to standard equity options.
Understanding Market Holidays and Early Closes
Beyond daily closing times, market holidays and special events introduce further alterations to option trading schedules. U.S. financial markets, including those for options, observe federal holidays, resulting in full market closures. On these designated holidays, such as New Year’s Day, Martin Luther King Jr. Day, or Christmas Day, no trading occurs.
Traders should consult official holiday calendars published by exchanges, such as the NYSE and Nasdaq, to anticipate these full closures. These calendars provide specific dates when markets will be entirely shut down. Planning for these non-trading days is crucial for managing option positions that might be affected by upcoming news or events during the closure period.
In addition to full closures, markets often implement “early closes” or “half-day sessions” on certain dates, typically preceding or following a major holiday. Trading concludes earlier than the usual 4:00 p.m. ET during these instances. Markets may close at 1:00 p.m. ET, or 1:15 p.m. ET for eligible options, on days such as the day before Independence Day, the day after Thanksgiving, or Christmas Eve. These abbreviated sessions require traders to adjust their strategies and execution timelines.