An option that has, in addition to the right of exercise on the underlying, an additional right to extend its maturity date. In other words, this option can be extended by its buyer or seller who may choose, at the expiration date, to extend the life of the option by a specified period of time. Extendible options are generally classified as holder-extendible options (buyer-extendible options) and writer-extendible options (seller-extendible option). As the name implies, a holder-extendible option allows the holder to extended the contract at his own discretion. However, the holder must pay the seller an additional premium upon exercising the right to extend. For writer-extendible options, the writer has the right to extend the option as he deems appropriate. The writer does not pay the holder any extra amount, or waiver any portion of the premium, in order to extend the option.

Predictably, the option will be extended only if it is out of the money, as there is little value in extending the option if it is already in the money. Extendible options come in two forms: extendible calls and extendible puts.