Expiration Dates
Futures options usually expire near the end of the month that precedes the delivery month of the underlying futures contract (i.e. March option expires in February) and very often, it is on a Friday.
Strike Price
This is the price at which the futures position will be opened in the trading accounts of both the buyer and the seller if the futures option is exercised.
Exercise & Assignment
When a futures option is exercised, a futures position is opened at the predetermined strike price in both the buyer and the seller's account.
- A
short call option will be assigned a short futures position at the strike
price.
- A short put option will be assigned a long futures position at the
strike price.
- A
long call option will become a long futures position from the strike price.
- A
long put option will become a short futures position from the strike price.