General Securities Representative (Series 7) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the General Securities Representative (Series 7) Exam. Boost your confidence with flashcards and multiple choice questions, each featuring explanations. Prepare effectively for your evaluation!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

When do stock, index, and interest rate options typically expire?

Friday at 5:00 p.m. CT
10:59 p.m. CT on Saturday after the 3rd Friday of the expiration month
Saturday at 10:00 a.m. CT
Friday at 4:00 p.m. CT

The correct answer is: 10:59 p.m. CT on Saturday after the 3rd Friday of the expiration month

The correct answer is that stock, index, and interest rate options typically expire at 10:59 p.m. CT on the Saturday following the 3rd Friday of the expiration month. This aligns with the expiration rules set forth by the Options Clearing Corporation (OCC) and the general practices observed in the options markets. For stock and index options, the expiration occurs on the third Friday of the expiration month. However, these options are typically settled and cease trading that day at the market close. The actual formal expiration happens the following Saturday, allowing for final cash settlement before the market restart on Monday. This timing helps ensure that all transactions and settlements are processed without overlap with the active trading hours. Understanding the expiration timing is crucial for options traders as it directly affects strategies and execution planning. Knowing that the expiration process stretches into the weekend can help traders decide when to close positions, roll them over, or take other actions in anticipation of expiration and market movements.