What would happen to an option price if the business doesn’t hit the strike price by the close of business?

Asked 4 years ago

Quick question: Facebook option, strike price 325, expiring at the close of business tomorrow. The option price right now is showing at 0.82 What would happen to the option price if Facebook doesn’t hit 325 by the close of business tomorrow?

Strike price Option price Business closure Option expiration

Emmanuel Ajala

Monday, June 14, 2021

If the business stock price doesn't hit the strike price by expiration (which is close of the business), the contract will be "out-of-the-money". "Out-of-the-money" means the intrinsic value of the option derivative will be zero.
According to your example above, if the price of the Facebook option is below 325 or at 325 at expiration, the option will be worthless (i.e. zero.) 