In discussing the call spread, it was noted that both options (that comprise the spread) expire on the same date.  That date is knows as the options expiration date.

There one expiration date every month, and that's  Saturday, one day after the 3rd Friday of each month.  That 3rd Friday is the last day the option is traded. [For index options, the last day of trading is Thursday, one day earlier]  Anyone who still owns an option that has value - in other words, someone who has not sold that option - is going to exercise the option and convert it to stock.  A call becomes long stock and a put becomes short stock.

If you don't want to own this stock position, please sell your option.  And don't wait until the market is about to close on that 3d Friday.  sell it no later than a couple of hours earlier than that.

Index options are different.  Some have options that expire weekly and at the end of the calendar quarter.  [This is for informational purposes only.  It's likely you will never trade these weekly or quarterly options (I've never traded them)]

Because options don't trade after the 3rd Friday, many people refer to that day as expiration day, or 'expiration Friday.' Although that is technically incorrect, the common usage makes it acceptable. 

When you buy a call spread, such as the IBM Nov 120/130 call spread, these things are true:

• The Nov 120 call is worth more than the Nov 130 call and you must  pay a debit to buy this spread

• Both options expire on the same date, namely Saturday following the 3rd Friday of November

• When expiration arrives, if IBM is less than 120, both options are worthless and your loss is the cash paid

• When expiration arrives, if IBM is above 130, both options expire in the money and the spread is worth its maximum value, or $1,000

• You can exercise your call and pay $120 for 100 shares of $IBM

• The owner of the IBM 130 call will exercise, obligating you to sell shares at $130

• The difference is your profit.  $10 x 100 (each option represents 100 shares) = $1,000

• Profit = $1,000 less the price you paid to buy the spread.

Call spreads represent only one example of a 'strategy.'

Mark D Wolfinger

Expiring Monthly: The Option Traders Journal
http://www.expiringmonthly.com/