When Does Options Trading Close? Daily vs. Expiration Times

Understanding when options trading closes, both daily and on expiration, is important for financial market participants. Options contracts offer the right, but not the obligation, to buy or sell an underlying asset at a specified price before a certain date. Knowing trading and expiration schedules is essential for effective risk management and strategy implementation.

Standard Trading Hours for Options

Most options contracts on U.S. exchanges follow a standard daily trading schedule. Equity and exchange-traded fund (ETF) options open at 9:30 AM Eastern Time (ET) and close at 4:00 PM ET, Monday through Friday. This aligns with underlying stock market hours, providing a consistent trading window. While most equity options close at 4:00 PM ET, some index options, such as those on the S&P 500 (SPX) or Nasdaq 100 (NDX), may trade until 4:15 PM ET on non-expiration days. Liquidity is typically highest during these hours, making it easier for traders to enter and exit positions efficiently.

Options Expiration Schedules

Options contracts have specific expiration dates and times, distinct from daily trading hours. Most equity and ETF options expire on the third Friday of the contract month. The popularity of “weekly” options means many contracts now expire every Friday, offering more frequent trading opportunities. On their expiration day, trading for equity and ETF options typically ceases at 4:00 PM ET. The official deadline for option holders to submit exercise instructions to the Options Clearing Corporation (OCC) is 5:30 PM ET.

Index options often have different expiration timings. Some PM-settled index options may trade until 4:00 PM ET or 4:15 PM ET on their expiration day. AM-settled index options often cease trading on the Thursday preceding expiration Friday. The distinction between AM-settled and PM-settled index options affects final settlement value. AM-settled index options determine their settlement value based on opening prices of the underlying index components on expiration Friday, meaning trading stops the day before.

In contrast, PM-settled index options, including many weekly and end-of-month options, settle based on the closing value of the underlying index on expiration day. Once an options contract expires, it ceases to be tradable. In-the-money contracts are then automatically exercised or cash-settled.

Market Holidays and Early Closures

U.S. options markets close for most federal holidays. These include New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. If a holiday falls on a weekend, the market observes it on the preceding Friday or following Monday.

Beyond full-day closures, exchanges may also have early closures. For instance, markets often close early at 1:00 PM ET (or 1:15 PM ET for eligible options) on the day before Independence Day, the day after Thanksgiving, and Christmas Eve. When an options expiration date falls on a market holiday, the expiration date is typically moved to the immediately preceding business day. Traders should consult official holiday and early closure schedules published by exchanges.