NSE shifts Nifty Bank F&O contracts expiry day to Friday, change applicable from this date
2 min read 06 Jun 2023, 10:31 AM ISTAt present, Nifty Bank weekly contracts expire every Thursday, while monthly and quarterly contracts expire on the last Thursday of the expiry month.
PremiumThe National Stock Exchange of India (NSE) has decided to change the Bank Nifty Futures and Options (F&O) expiry day to Friday from Thursday. The new rule will come into effect from July 14.
In a circular issued on Tuesday, India's largest derivative bourse NSE said, "The above shall be effective from trade date July 7, 2023 Friday and accordingly, all existing contracts with Thursday expiry will be revised to Friday on July 6, 2023 EOD. The first Friday expiry will be on July 14, 2023,"
However, if Friday is a trading holiday, then the expiry day is the previous trading day.
At present, Nifty Bank weekly contracts expire every Thursday, while monthly and quarterly contracts expire on the last Thursday of the expiry month.
At EOD of July 06, 2023, the expiry date and maturity date for all existing futures and options contracts will be revised/postponed to 'Friday'.
If the expiry/maturity date of existing contract maturing on July 13, Thursday, will be postponed to July 14, Friday.
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Moreover, if the expiry/maturity date of existing contract maturing on the last Thursday of the month i.e. August 31 will be preponed to August 25, Friday, of the respective current expiry month.
“Any new contract created for trading on or after EOD of July 06 shall be created as per the revised expiry days as mentioned in the aforesaid table. Members are requested to note that there is no other change in the existing contracts specifications of Bank Nifty," NSE circular said.
The circular shall come into effect from EOD of July 06, 2023 and revised contracts shall be available for trading from July 07, 2023, it added.
Last month, NSE's rival bourse, BSE had relaunched Sensex and Bankex derivative contracts with a reduced lot size of futures and options and a new expiry cycle of Friday as against the expiry cycle of Thursday earlier.
“The NSE's decision to shift the expiry of Bank Nifty to Friday can be viewed from two perspectives. Firstly, BSE F&O contracts, which already expire on Friday, have gained popularity among traders due to lower charges compared to NSE. To counter this competition, NSE introduced the idea of shifting the expiry day. Secondly, NSE's previous successful experiment with the Finnifty's new expiry day may have influenced this decision," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
However, Meena added that expiry alone may not be the sole factor determining attractiveness. Transaction charges will also play a significant role, especially considering the appeal of BSE Sensex F&O contracts.
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