Chapter 1: Definitions s 
Striking Price. Striking prices are generally spaced 5 points apart for stocks, 
although for more expensive stocks, the striking prices may be 10 points apart. 
A $35 stock might, for example, have options with striking prices, or "strikes," of 
30, 35, and 40, while a $255 stock might have one at 250 and one at 260. 
Moreover, some stocks have striking prices that are 2½ points apart - generally 
those selling for less than $35 per share. That is, a $17 stock might have strikes 
at 15, 17½, and 20. 
These striking price guidelines are not ironclad, however. Exchange officials 
may alter the intervals to improve depth and liquidity, perhaps spacing the strikes 5 
points apart on a nonvolatile stock even if it is selling for more than $100. For exam­
ple, if a $155 stock were very active, and possibly not volatile, then there might well 
be a strike at 155, in addition to those at 150 and 160. 
Expiration Dates. Options have expiration dates in one of three fixed cycles: 
L the January/April/July/October cycle, 
2. the February/May/August/November cycle, or 
3. the March/June/September/December cycle. 
In addition, the two nearest months have listed options as well. However, at any given 
time, the longest-term expiration dates are normally no farther away than 9 months. 
Longer-term options, called LEAPS, are available on some stocks (see Chapter 25). 
Hence, in any cycle, options may expire in 3 of the 4 major months (series) plus the 
near-term months. For example, on February 1 of any year, XYZ options may expire 
in February, March, April, July, and October - not in January. The February option 
( the closest series) is the short- or near-term option; and the October, the far- or long­
term option. If there were LEAPS options on this stock, they would expire in January 
of the following year and in January of the year after that. 
The exact date of expiration is fixed within each month. The last trading day for 
an option is the third Friday in the expiration month. Although the option actually 
does not expire until the following day (the Saturday following), a public customer 
must invoke the right to buy or sell stock by notifying his broker by 5:30 P.M., New 
York time, on the last day of trading. 
THE OPTION ITSELF: OTHER DEFINITIONS 
Classes and Series. A class of options refers to all put and call contracts on the 
same underlying security. For instance, all IBM options - all the puts and calls at 
various strikes and expiration months - form one class. A series, a subset of a class,