What has SEBI decided regarding the expiry days on exchanges? When will the changes be implemented?
The markets regulator has assigned Tuesday as the expiry day for all derivatives contracts of the National Stock Exchange (NSE) and Thursday for BSE’s contracts following the restriction of weekly expiry days to only two days–Tuesday and Thursdays.
For existing contracts, both NSE and BSE clarified that expiry dates will remain unchanged, except for long-dated index options. However, for new contracts, expiry days will shift from September 1 onwards. Monthly contracts will now expire on the last Tuesdays for NSE and last Thursdays for the BSE. SEBI will issue a detailed circular defining operational modalities in due course.
How will this change impact traders and investors?
SEBI’s goal is to curb hyperactivity on expiry days and reduce the risk of volatility spikes by spreading out weekly derivatives expiry days. For derivatives traders, they will have to realign their trading strategies to the changed expiry days. A trader trading in Nifty 50 contracts will now roll or close positions by Tuesday instead of Thursday; Sensex traders will plan for Thursday. A Tuesday expiry will benefit the NSE as traders will now have three working days to make decisions and lower the time decay over the weekend, said analysts.
Meanwhile, BSE could also gain in the middle-of-week hedging market, since a Thursday expiry comes closer to the weekend–potentially attracting hedgers who prefer end-of-week coverage. Overall, traders and investors should see a smoother calendar: expiry-linked volatility will now cluster on two separate days rather than one. SEBI believes this decongestion will improve market stability.
Here is a brief background of the skirmish going on since last year over expiry days.
This change caps a year-long tussle between NSE and BSE over expiry days in their growing derivatives businesses. The battle began in 2023 when the exchanges started playing with expiry schedules: for example, BSE launched weekly contracts for its Sensex and Bankex indices in May 2023 and eventually moved Sensex futures expiry to Tuesday in January 2025. Since then BSE had seen a surge in its index derivatives volumes. BSE’s share in index options rose from 3.1 percent a year ago to 12.6 percent, with premium turnover climbing from 16 percent in December 2024 to around 22 percent now. Soon after, NSE was eyeing a shift of Nifty expiry to Mondays, when SEBI intervened to limit expiry days to Tuesdays and Thursdays.
Both exchanges had enjoyed the flexibility to change their final settlement days through the past year, leading to frequent shifts as each tried to attract traders. Based on renewed choices of each exchange, SEBI has now assigned Tuesday to NSE and Thursday for BSE. This interchanges the existing expiry days of the two top exchanges.
Why is the expiry day important to BSE and NSE?
Expiry days are crucial for the exchanges because index derivatives drive huge trading volumes and revenue. Every weekly expiry attracts heavy activity and trading fees as many traders close or roll positions simultaneously. Control over expiry timing can therefore shape market share. Until now, Thursdays had been the traditional expiry day in India. The expiry day affects where and when traders place their bets.
If BSE’s contracts expire on a different day than NSE’s, some traders may switch to one exchange for timing or pricing reasons. NSE applied for Tuesday to have the first expiry day of the week, after it had to scrap its initial plan to move Nifty 50’s expiry to Monday.
BSE CEO said that Thursday expiry aligns well with global market practices with most foreign institutional investors having algorithms aligned with that day of the week. Further, most investors start their derivatives strategy for the week at the start of the week, and thus Thursday expiry offers more time to respond to market developments and optimise their positions.
Has the fight over expiry days come to an end now?
Yes. SEBI’s new rule forces both exchanges to stick to Tuesdays or Thursdays, and any change requires regulator approval. With NSE locked into Tuesdays and BSE into Thursdays from September, neither can unilaterally alter its schedule without the regulator’s say-so. SEBI Chairman Tuhin Kanta Pandey said at the latest board meeting that this was the final allocation and there will be no changes going forward. Unless SEBI revisits this policy, the weekly expiry war is settled. Traders now know to expect NSE-index expiries midweek and BSE-index expiries later in the week. Analysts expect this allocation to create a level playing field among exchanges and settle the uncertainty over expiry days.
Published on June 20, 2025