The last price of the underlying assets primary exchange will be used to calculate how much the option finished in the money. You will collect the difference in cash in your account.
2 things to note:
- Assuming this is a stock or ETF option and not a futures or other type of a option, you probably assume that options stop trading at 4 o’clock eastern and b) any options expiring on that date, must be exercised or not by that time.
Both would be incorrect.
Listed options on stocks and etfs stop trading at 4:15. Some options (weekly expiration with an index underlying) stop trading at 4:00 that date.
The actual expiration occurs on the Saturday following the preceding day, but more importantly, you have until 5:30 eastern time on the last day of the expiration period to notify your broker of your intent.
With all that said, unless you are a fortune teller, or dealing with inordinate amounts of money, you shouldn’t own an option into expiration. You likely have zero commissions so, sell it for more than it will expire at. (There is time premium until the last little bit of time)