Greenlight Exam 2 Prep: Comprehensive Practice Exam & Study Guide

Listed equity options cease trading on their expiration date at 4:00 p.m. Eastern Time. This timing aligns with the close of trading for most equity securities on the major U.S. exchanges, which include the New York Stock Exchange (NYSE) and NASDAQ. On expiration dates, option contracts that are not exercised or closed out by this time will expire worthless, and it is crucial for traders to be aware of this deadline to optimize their strategies and make informed decisions regarding their options positions.

The significance of this closing time is particularly important for those trading options, as it marks the final opportunity to engage in trading activities for those contracts on that particular day. Understanding the exact trading hours is essential for managing the risk and timing involved in options trading.