Learn the stock market › Options › Lesson 6 of 9
Strike price and expiration date
In, at and out of the money
Three words describe the position. A call is in the money when the stock is above the strike and out of the money when it is below. For a put it is the other way round. With the stock at the strike the option is at the money.
The expiration date
Most US stock options that expire in a given month do so on its third Friday. If that Friday is an exchange holiday, expiration moves to the Thursday before. Many products now also offer shorter terms.
How often did an option end with value?
We took every trading day in Microsoft since Jan 2, 2015 as a start, 2,917 periods, and looked at the price 63 trading days later, about three months. The table shows how often an option with a given strike would have ended with value.
| Strike against the price at purchase | Call ended with value | Put ended with value |
|---|---|---|
| 20% above | 9% | 91% |
| 10% above | 35% | 65% |
| Same as the price | 72% | 28% |
| 10% below | 93% | 7% |
| 20% below | 99% | 1% |
With a strike 20% above the price the call ended with value in 9% of the periods, and with a strike 10% below the price the put ended with value in 7%.
Ending with value is not the same as a gain, because the premium has to be covered first. The numbers are for one company in a period when its stock rose, which favours the calls in the table. The periods overlap, so a single year on the market counts many times. Prices run through Nov 6, 2026.
Test yourself
A call has a $50 strike and the stock is at $60. How is the position described?
How the price has moved: Why did Microsoft move?
Sources
- Options Industry Council, Options Basics, read November 5, 2026: expiration on the third Friday.
- US Securities and Exchange Commission, An Introduction to Options, updated July 16, 2026: in and out of the money.