Indian futures and options markets rank among the most liquid globally for exchange-traded derivatives. This phenomenon can be attributed to the increased participation of Foreign Institutional Investors (FIIs), Domestic Institutional Investors (DIIs), and, in recent years, retail investors.

This surge in participation prompted one of India’s oldest exchanges, the BSE, to launch its own derivatives operations in recent years. Consequently, Indian markets now offer expiry options every day of the week. This expanded flexibility allows institutions to effectively hedge their positions while enabling individual investors to take advantage of buying or selling opportunities for short-term gains.

This article briefly overviews the expiry days for tradable contracts.

What is Expiry Day?

The expiry day of an F&O contract is the day on which it is due for settlement between the buyers and sellers of the contract. After the expiry day these contracts are either settled physically i.e the underlying security is delivered at the strike prices agreed upon or they are cash settled i.e the difference between the strike price and the price at which the underlying has expired is settled in cash between the buyers and sellers.

In Indian markets all stock options and futures contracts are physically settled i.e the underlying security is delivered. While all the index futures and options contracts are cash settled between the buyers and sellers.

Update: Changes to NSE Weekly Options Derivatives

Starting November 20, 2024, both exchanges will offer weekly derivatives contracts for only one benchmark index. 

Key Update from NSE

The NSE has announced that it will continue offering weekly index options exclusively for the Nifty 50 Index (NIFTY). Weekly index options for all other indices will be discontinued after their final expiry dates.

NSE Affected Indices and Last Trading Dates:

There will be no new weekly index options introduced for these indices after the dates listed above.

Index NameSymbolLast Expiry Date
Nifty BankBANKNIFTYNovember 13, 2024
Nifty Midcap SelectMIDCPNIFTYNovember 18, 2024
Nifty Financial ServicesFINNIFTYNovember 19, 2024

Expiry Day for Nifty Options

The weekly expiry day for Nifty 50 index options will continue to be every Thursday.

Note:

  • In the last week of the month, the same contracts also serve as monthly contracts. This is also the day when the futures contracts for this indice expire and settle.
  • All index derivatives contracts in the Indian markets are cash-settled according to exchange regulations.

Expiry Days for BSE Options Derivatives

Effective November 20, 2024, each exchange will offer weekly derivatives contracts for only one benchmark index. Here are the details regarding the affected indices, their last trading dates, and key updates for traders:

Changes Announced by BSE

The BSE has decided to discontinue weekly index derivatives contracts for specific indices. Existing contracts will remain active until their respective expiry dates, but no new weekly contracts will be introduced thereafter.

BSE Affected Indices and Expiry Dates

Index NameLast Expiry Date
SENSEX 50November 14, 2024
BANKEXNovember 18, 2024

Expiry Day for BSE SENSEX

Following these changes, the BSE will offer weekly options expiry for only one index: the BSE SENSEX. These contracts will expire every Friday.

What Happens on the Expiry Day?

There are different scenarios which might play out on the expiry day. Below are the examples of the same for your better understanding-

Automatic Exercise:

Most exchanges automatically exercise options contracts that expire in the money (ITM). This means if you hold an ITM call or put option, you will be assigned the difference between the strike price and the last traded price in a cash-settled contract. 

For Out-of-the-Money (OTM) Options:

Options contracts that expire out-of-the-money (OTM) lose all their value and expire worthless. The premium paid for the option is forfeited.

Conclusion

Understanding expiry days is crucial for anyone trading F&O contracts in India. With the recent introduction of weekly expiry options, Indian markets offer exceptional flexibility for managing risk and capitalizing on short-term opportunities.

By familiarizing yourself with the specific expiry days for your chosen contracts you can make informed trading decisions and navigate the Indian derivatives market with greater confidence.