The expiration date is the last day of the option's validity. The maturity date of a bond refers to the date when the principal is repaid.
For European options, this is the only day that the buyer can exercise his rights; For American options, this is the last day that the buyer can exercise his rights. In the simulated trading, the expiration date of the options for strong wheat and cotton is the fifth trading day one month before the underlying futures month.
The term of the option determined by the expiration date will affect the time value of the option. Whether it is a call option or a put option, the longer the maturity date, the higher the value of the option. Because the longer the time, the greater the probability that futures prices will rise or fall.
Extended data:
Significance and influence of bond maturity date
1, the maturity date indicates the expected duration of the bond, how many interest-bearing periods investors can get and how long it will take to repay the principal;
2. Maturity date has a great influence on bond yield, which is influenced by the change of bond yield curve shape;
3. The maturity date affects the fluctuation of bond prices.
4. The change of market interest rate has greater influence on long-term bonds than short-term bonds;
5. Some bonds also contain terms of term change. For example, the terms of early redemption, termination, recovery and resale will affect the future yield of bonds;
6. Generally, bonds with a maturity of 1-5 years are called short-term bonds, bonds with a maturity of 5- 12 years are called medium-term bonds (medium-term notes), and bonds with a maturity of more than 12 years are called long-term bonds.
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