Quarterly Options
Quarterly options are contracts that expire at the end of each calendar quarter — March, June, September, and December — and are most commonly used on broad index products at the CBOE to align with institutional portfolio rebalancing and hedging schedules.
Quarterly options follow the end-of-quarter settlement dates that correspond to standard financial reporting periods. Unlike standard monthly equity options, which expire on the third Friday, quarterly options on major indexes typically expire on the last business day of the quarter. This timing is significant for institutional users such as pension funds, endowments, and asset managers who systematically hedge equity portfolios at quarter-end to lock in gains or protect against drawdowns.
The CBOE lists quarterly options on several major index products, including the S&P 500 (SPX Quarterlys). These contracts provide a tool for managing exposure over an entire fiscal quarter with a single position rather than rolling monthly contracts. Because they align with earnings seasons and macroeconomic reporting cycles, quarterly expirations are a natural fit for hedging programs tied to fundamental calendar events.
Open interest in quarterly options tends to be large because a meaningful portion of institutional hedging demand concentrates at quarter-end. This concentration also contributes to the widely observed phenomenon of quarter-end volatility as dealers hedge their exposure ahead of final settlement, particularly in the S&P 500 where large notional positions are involved.
From a pricing perspective, quarterly options are valued using the same Black-Scholes-derived framework as monthly and weekly contracts, with the remaining time to expiration as one of the key inputs. Theta decays more slowly for quarterly options than for shorter-duration contracts, meaning buyers retain time value for longer — a feature that some long-term hedgers find attractive because it reduces rollover costs compared to repeatedly purchasing shorter-dated protection.
For equity options on individual stocks, the original quarterly expiration cycles (Jan/Apr/Jul/Oct, Feb/May/Aug/Nov, and Mar/Jun/Sep/Dec) still determine which months are listed beyond the front two. Traders can identify quarterly-cycle months by examining the expiration calendar on their broker platform.