The February, May, August, and November options cycle

What is FMAN (February, May, August, and November)?

FMAN is one of the three options cycles, and it comprises multiple options contracts that share the same terms and expire in the months of February, May, August, and November. The Chicago Board Options Exchange requires that commodities, indexes, and common stocks should be assigned to a cycle that comprises four expiration months. Apart from FMAN, the other cycles include JAJO (January, April, July, and October) and MJSD (March, June, September, and December).




Options that are traded in any of the cycles will have contracts that expire in the current month and in the subsequent month. The expiration date is usually the third Friday of the month, and if it falls on a holiday, it is pushed back to preceding Thursday. The next cycle starts on the following Monday after the expiration date.



  • FMAN is an acronym for the months of February, May, August, and November.
  • Options contracts in the FMAN cycle share the same features and expiration months.
  • Options contracts are only valid up to the expiration date, and they must be exercised before or on the expiration date to recoup any intrinsic value of the option.


Basics of Options Expiry

Options have a limited life, which means that they are only valid until the expiration date. Traders can exercise or close the trade before or on the expiration date by taking an offsetting position in order to realize any gains or losses on the derivative.

When a trader exercises an option, they are buying or selling the underlying asset at the strike price agreed in the options contract. If the trader does not want to exercise the option, they can let the option expire worthless and lose any premiums paid at the start of the contract.


Choices Available to the Options’ Holder

If a trader or an options’ writer exercises the option, they will receive the premium paid when the option is bought by the buyer. It is the best option for a trader who wants to realize a profit or loss (the difference between the purchase price and the current option price) on the contract. If the trader lets the contract expire worthless, the contract becomes invalid and cannot be exercised. If it happens, the seller will keep the premium. The expiration date is the last Friday of the month, and traders must make a decision on what to do with the options contract before the last trading day.

Sometimes, the broker may be authorized by the options’ holder to automatically exercise an in the money options contract on their behalf. Sometimes, a trader may request their brokers not to exercise the options contract automatically due to certain reasons such as lack of adequate capital to buy the underlying stock. Although the trader may not be interested in exercising the option, they can still close their position before or on the expiration date to recover any intrinsic value attributable to the option.


Option Expires In the Money vs. Option Expires Out of the Money

If a contract expires in the money, the seller is required to sell the underlying asset to the option buyer at the strike price. The option holder can buy the option at a price that is below the market price. However, trading an in the money option does not necessarily mean that the option holder will make a profit since the commission fees and expenses of trading the option must be accounted for.

An options contract that expires out of the money has a less favorable strike price compared to the market price of the underlying asset. Being out of money does not necessarily mean that the option holder will make a loss. If the option holder paid a premium price that was far out of money, and the option is moving closer to being in the money, the trader has a chance to make a profit. However, if the option is out of the money at expiry, it will be worthless. If an option is out of the money, the holder must exercise the option before the expiration date in order to enjoy any extrinsic value attached to it.


Practical Example of FMAN Cycle

On February 15, an investor plans to purchase an options contract for ABC Limited, and the option is traded on the FMAN Cycle. The expiration dates for the options contract is at the end of business on the third Friday of the current month and the subsequent month. In this case, the options contract will expire on February (current month), March (subsequent month), August, and November (from the cycle schedule).

On March 15, an investor intends to purchase an options contract for ABC Limited, and the option is traded on the FMAN cycle. The expirations dates for this option on the FMAN cycle is as follows: March (current month), April (subsequent month), August, and November (from the cycle schedule).


More Resources

CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful:

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