Expiry Cycle Explanation
September 21, 2025
This post explains in detail the important components of the setup, and activity around an expiry cycle and it’s related figures.
| January 16, 2026 | |||||||
|---|---|---|---|---|---|---|---|
| Short Put Options (Bullish, similar to buying stock) | |||||||
| QTY | Strike | ▲ | Price | Premium | BPE | Extrinsic | ITM Risk |
| 8 | 76 | 0.32 | $1.60 | $1,274 | -$7561 | $1.62 | 35.1% |
| 8 | 78 | 0.43 | $2.10 | $1,674 | -$9161 | $2.10 | 44.6% |
| 4 | 80 | 0.57 | $2.95 | $1,177 | -$4700 | $1.25 | 56.9% |
| Short Call Options (Bearish, similar to shorting stock) | |||||||
| QTY | Strike | ▼ | Price | Premium | BPE | Extrinsic | ITM Risk |
| 2 | 82 | 0.30 | $0.95 | $188 | -$1610 | $0.95 | 28.2% |
| 4 | 83 | 0.23 | $0.65 | $257 | -$3134 | $0.65 | 21.5% |
The table is an example of an entire month of options being sold to create “premium” which is the initial income component. The end result that this premium ends up being actual income kept has to wait until the expiry date of the contracts, or an event prior to expiry which moves the manager to close the contract early for any reason.
In this expiration cycle, a total of $4,570 has been collected at the time of sale. It is very likely that some of that premium will have to be paid to later buy back those contracts, but at a reduced price.
For an extended explanation of each detail in the table, follow: FULL EXPIRY CYCLE EXPLANATION.
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