The time on an option‘s expiration date after which the option no longer exists. It is at this time that the holder of a European option decides whether the option will be exercised or not. This time also represents the last opportunity for the holder of an American option to exercise. An unexercised option expires worthless after the expiration time on the expiration date. Standard market cut times vary across exchanges (e.g., 3pm Tokyo, 10am New York, etc).

The cut time is typically agreed between the counterparties at the contract date.