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The shift of the Nifty’s F&O expiry from Thursday to Monday is likely to impact the business of the BSE, whose shares fell by over 3.6 per cent on Monday after the NSE’s announcement.
The NSE Nifty says all Nifty index weekly derivatives contracts will expire on Monday instead of Thursday, with effect from April 4.
The National Stock Exchange (NSE) has changed the weekly and monthly expiry of futures and options (F&O) segment. It said all Nifty index weekly derivatives contracts will expire on Monday instead of Thursday, with effect from April 4. The monthly contracts will also expire on the last Monday of the month, instead of Thursday.
In a circular, NSE said that the expiry day for Nifty weekly futures & options (F&O) contracts will change from Thursday to Monday of the expiry week, while Nifty monthly, quarterly, and half-yearly contracts expiry will shift from the last Thursday of the month to the last Monday of the expiry month.
Additionally, the exchange also shifted F&O expiry for Bank Nifty, FinNifty, Nifty Midcap Select and Nifty Next50 to the last Monday of the expiry month from April 4.
“The circular shall come into effect from April 4, 2025 i.e. Expiry day for all existing contracts will be revised to ‘New Expiry Day’ on April 3, 2025 (EOD),” the exchange said in a circular.
What Does It Mean, Why Has NSE Changed Its Expiry Day?
The NSE management says the rationale of the decision to shift the expiry day from Thursday to Monday was that there are a lot of geopolitical events over the weekend. “Monday is a great day to have the expiry,” said Sriram Krishnan, chief business development officer of NSE.
Experts said the move is likely to allow investors to buy cheaper options now at the end of Fridays to bet on Mondays.
How Does It Impact BSE’s Business?
The shift of the Nifty’s F&O expiry from Thursday to Monday is likely to impact the business of the BSE, whose shares fell by over 3.6 per cent on Monday after the NSE’s announcement.
How Will It Impact BSE’s Business? The BSE Sensex has a expiry on Tuesday. On expiry day, huge volumes comes in as more and more investors participate in F&O trade as the day provides opportunities like hero-zero trade and high volatility. So, now, as the Nifty will expire on Monday (a day before BSE Sensex), traders will do trading on Mondays, thus impacting BSE’s business the next day.
Earlier, Sensex used to expire on Fridays, which was changed to Tuesday in November.
What Is A Derivatives Market?
Derivative in financial markets typically refers to a forward, future, option or any other hybrid contract of pre-determined fixed duration, linked for the purpose of contract fulfilment to the value of a specified real or financial asset or to an index of securities.
Broadly, there are two types of derivative contracts — futures and options. A futures contract means a legally binding agreement to buy or sell the underlying security on a future date, while options contract gives the buyer or holder of the contract the right (but not the obligation) to buy or sell the underlying asset at a predetermined price within or at end of a specified period.
