NSE Changes Bank Nifty Futures and Options (F&O) Expiry Day: What Does It Mean For Traders?

The Bank Nifty Futures and Options (F&O) expiry day will now be on Friday instead of Thursday, according to the National Stock Exchange of India (NSE). The new regulation will take effect on July 14th.

"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," "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.

Commenting on the development Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd said "The National Stock Exchange (NSE) has announced a significant modification through its circular, dated 6th June'23, regarding the expiry day for Bank Nifty futures and options (F&O) contracts. This modification shifts the expiry day from Thursday to Friday, providing traders with an additional day to trade and manage their positions for both weekly and monthly expiries.

The adjustment is expected to enhance liquidity and volatility in the markets, while concurrently aligning the monthly expiry of the S&P 500 with the last working day of the month, which is Friday. This alteration will result in F&O contracts expiring on different days throughout the week, with Fin-Nifty expiring on Tuesday, Mid-Cap Nifty on Wednesday, Nifty on Thursday, and Bank Nifty on Friday. The effective date for this change is set to be July 7, 2023. It is essential to note that the change in expiry day will not affect BSE F&O contracts, as the Bombay Stock Exchange (BSE) has not revealed any plans to modify the expiry day for its F&O contracts."

A R Ramachandran, Co-founder & Trainer-Tips2trades said "As NSE looks to gain competitive advantage over BSE, the Nifty Bank expiry has been shifted to Friday. This will not impact Nifty Bank traders in any way but if both BSE & NSE having same day as expiry day would have surely made it easier for investors to remember and accordingly adjust their trading positions."

Nifty Bank contracts currently expire on Thursday for weekly contracts and on the last Thursday of expiry month for monthly and quarterly contracts. The expiry date and maturity date for all existing futures and options contracts will be changed to "Friday" at EOD on July 6, 2023. The expiry date and maturity date for all existing F&O contracts will be changed to Friday, the NSE announced after the conclusion of the trading day on July 6. Existing contracts that would have matured on Thursday, July 13, will instead expire on Friday, July 14. The current contract's expiration date, which was set to be August 31 (Thursday), will now be August 25 (Friday) of the relevant current expiry month.

Jay Thakkar, Head Alternate Research, Sharekhan by BNP Paribas said "NSE's decision to shift Bank Nifty's weekly expiry to Friday instead of coinciding it with the weekly expiry of Nifty on Thursday should help bring in better trader focus on each index and result in boosting overall volumes in the two most popular indices in the derivative segment. Additionally, it would also be in sync with the expiry on Friday done by BSE."