An option is a contract to buy or sell a specific financial product. This product is known as the option’s underlying instrument or underlying interest. For equity options, the underlying instrument is a stock, exchange traded fund (ETF) or similar product.
The contract itself is very precise. It sets a price, called the strike price, at which the contract may be exercised, or acted on. In addition, it has an expiration date. When an option expires, it no longer has value and no longer exists.