The National Stock Exchange (NSE) announced on Tuesday, March 4, 2024, that the weekly expiry of F&O contracts will be revised from Thursday to Monday. Further, all monthly, quarterly and half-yearly contract expiries will be shifted from the last Thursday to the last Monday of the expiry month. In this article, let’s look at the revised structure and how it affects traders and investors.
What Are The F&O Expiry Day Changes By NSE?
According to a circular issued by NSE, the F&O revised expiry dates for Index and Stock derivatives contracts will come into effect from April 04, 2025. The revised schedule looks as follows:
What Is An Expiry Day In Derivative Trading?
Under Future & Options (F&O), contracts have an expiry date. So, every contract undertaken will have a fixed expiration date, and on this date, the contract will automatically expire, meaning that the trader will not be able to buy or sell units under that contract.
To avoid confusion, the Indian Stock Market has a fixed expiry date for the F&O market. Since the expiry date involves the closures of multiple F&O contracts, the stock market may experience volatility.
How Will This Change Impact Traders & Investors?
- For Options Traders: For options traders, expiry-related price movements will now occur on Mondays instead of Thursdays. Weekend news and global events may lead to bigger price swings on Monday morning.
- For Futures Traders: The expiry settlement process for futures traders remains the same, but traders must now adjust and manage positions differently with Monday expiries.
- For Stock Market Investors: Revision in expiry will have no major impact for long-term investors. Stocks with high F&O participation may see increased volatility on Mondays, which could influence short-term stock prices.
What Happens To Existing F&O Contracts That Are Expiring In April Or After It?
The exchange specified that weekly expiries scheduled for NIFTY on 6th March, 13th March, 20th March, and 03 April, will see no change. Further, weekly expiries scheduled from 17th April (Thursday) onwards will follow the revised expiry schedule.
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