Time to Expiration

You can also get an idea of the time to expiration by looking at an option symbol. In the example above, the month code (U) indicates the option expires in September. The actual expiration date is not evident in the option symbol. However, Aspen Graphics uses the symbol’s month code, the INFO.TXT file, and a set of option expiration rules to calculate the amount of time to expiration.

Options traders usually measure time to expiration in calendar days. Calendar days are days on which the interest rate applies. Time to expiration is calculated using a seven-day week. Weekends and observed holidays are included. With Aspen Graphics, not only can you choose calendar days, but also business days (a five-day week), or trading days (a five-day week less observed holidays) to figure time to expiration.