How Equity Option Expiration Cycles Determine Listed Months
Summary
The document explains why different stocks may show different listed option expiration months. Historically, each stock belonged to a January, February, or March cycle, which determined which months in each quarter were available. Later rules ensured that every stock had options listed for the current month and the following month, while the more distant quarterly expirations continued to depend on the stock’s assigned cycle. This can make one month appear for one stock and not another.
Long-term equity anticipation securities can add further expirations, commonly with January dates; the source says new listings depend on the underlying stock’s cycle. The answer refers readers to an external explanation because the listing rules are described as complicated. It gives historical context rather than confirming the current listing schedule or explaining exchange-specific listing decisions. The example concerns two stocks observed on a particular date, so it should not be taken as a current snapshot of their options availability.
Key ideas
- Stocks were historically assigned to one of three quarterly expiration cycles.
- Listed options include the current month and following month, while farther quarterly months follow the assigned cycle.
- Long-term options can add expirations beyond the standard near-term and quarterly listings.
- Expiration availability can differ across stocks because of their cycle assignments.
- The example is historical and does not establish present-day listing availability.
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Full text
# Why do some stock options have expiration dates for a given month, while others don't? # Why do some stock options have expiration dates for a given month, while others don't? Take two stocks, WWE and XPO, both traded on NYSE. Today, May 28, 2014, ### XPO has options expiring August 2014... ### ...while WWE doesn't: Why is that? From my experience, the missing expiration month options do eventually show up, so I've linked the screenshots above to Google Finance to check later. ## Answer by sashkello (score 2) https://quant.stackexchange.com/a/11490 There is a good explanation of this on Investopedia. A few quotes summarizing the issue: > Not All Stocks Trade the Same Options When stock options first began trading, each stock was assigned to one of three cycles: January, February or March. There is no meaning as to which cycle a stock was assigned - it was purely random. Stocks assigned to the January cycle had options available only in the first month of each quarter: January, April, July and October. Stocks assigned to the February cycle had only the middle months of each quarter available: February, May, August and November. Stocks on the March cycle had the end months of each quarter available: March, June, September and December. The Modified Expiration Cycles the original rules were modified, and in 1990, the CBOE decided that every stock would always have the current month plus the following month available to trade. Every stock has at least four expiration months trading. Under the new rules, the first two months are always the two near months, but for the two farther-out months, the rules use the original cycles. Adding LEAPS If a stock has LEAPS available, then more than four expiration months will be available. LEAPS are long-term options that, with some exceptions, are no more than three years out and usually trade with a January expiration date. If a stock does have LEAPS, then new LEAPS are issued in May, June or July depending on the cycle to which the stock is assigned. But you really need to read through all of the article (and follow the links there) to understand the issue, it is quite convoluted. ## Answer by tyls (score 1) https://quant.stackexchange.com/a/11479 It's on a different expiration cycle.
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