NSE Announces Change in Expiry Days for Nifty Bank F&O Friday from Thursday
Highlights
- Introduction: NSE Announces Change in Expiry Days for Nifty Bank Derivative Contracts
- expiry for Bank Nifty Futures and Options (F&O) to Friday instead of Thursday, effective July 7, 2023.
- No Other Changes to Nifty Bank Contracts
- Nifty Financial expiry on Tuesday, Nifty Midcap Select on Wednesday, Nifty 50 on Thursday and now Bank Nifty on Friday.
- Analysts’ Perspective: Enhanced Focus on Nifty and Nifty Bank Derivatives
The National Stock Exchange (NSE) made an important announcement on Tuesday regarding the weekly expiry of Nifty Bank derivative contracts. In a circular, the NSE revealed that the expiry day for these futures and options contracts would be shifted from Thursdays to Fridays. This change aims to streamline the trading process and improve market efficiency.
Transition to Friday Expiry: Benefits for Traders and Market Participants
Commencing from July 14, the first Nifty Bank derivative contracts will expire on a Friday instead of a Thursday, marking a significant shift in the trading landscape. Traders and investors can expect enhanced focus on the banking index, with an optimized trading strategy that aligns with the revised expiry days.
Moreover, the NSE specified that existing contracts with a Thursday expiry would be either revised or postponed to Fridays, starting from July 6. For instance, a contract with a July 13 (Thursday) expiry will be rescheduled to the next day, July 14 (Friday). Similarly, an August 31 (monthly) expiry will be moved up to August 25 (Friday), allowing market participants to adjust their trading plans accordingly.
With this change, NSE will now have an F&O expiry on every day of the week barring Monday, with effect from the week starting July 9.
There is the Nifty Financial expiry on Tuesday, Nifty Midcap Select on Wednesday, Nifty 50 on Thursday and now Bank Nifty on Friday.
Nifty Financial initially had a Thursday expiry, but that was later changed to Tuesday, ostensibly to ensure that traders interest was not spread thin across three contracts in a single day. The shift worked well for NSE with trading volumes in Nifty Financial soaring.
Read Also : NIRF Rankings 2023: Top 10 Engineering Institution – IIT Madras Tops again
Revised Contract Expiry Schedule: Important Dates to Remember
To facilitate a smooth transition, it is essential for traders to be aware of the revised contract expiry schedule. As per the circular provided by the NSE, any new contracts created for trading on or after July 6 will follow the revised expiry days outlined in the table. This adjustment ensures that all market participants are well-informed and can adapt their trading strategies accordingly.
| Expiry day | Current expiry day | Revised expiry day |
| Weekly contracts | Thursday of every week excluding the expiry week of the monthly contract | All existing weekly contracts shall expiry on Friday every week |
| If Friday is a trading holiday, the expiry day is the previous trading day | ||
| Monthly & quarterly contracts | Last Thursday of the expiry month | All monthly contracts shall expiry on the last Friday of the respective contract month |
| If Friday is a trading holiday, the expiry day is the previous trading day | ||
| Source: NSE circular | ||
All other terms and conditions remain unaffected
It is crucial for members of the exchange to note that apart from the change in expiry days, there are no other modifications to the existing Nifty Bank contracts specifications. All other terms and conditions remain unaffected, ensuring consistency and familiarity for traders. This adjustment solely focuses on optimizing the expiry day, providing traders with a more streamlined trading experience.
Settlement Schedule Updates: Communication from Clearing Corporations
While the NSE has provided information regarding the shift in expiry days, the settlement schedule will be separately communicated by the clearing corporations. It is imperative for market participants to stay updated with the notifications and instructions issued by the clearing corporations to ensure seamless settlement processes.
Analysts’ Perspective: Enhanced Focus on Nifty and Nifty Bank Derivatives
Industry analysts anticipate that this strategic move by the NSE will significantly aid traders in focusing on both Nifty and Nifty Bank derivatives. With a revised expiry schedule that aligns with broader market trends, traders can better plan their investment strategies and capitalize on market movements.
In conclusion, the NSE’s decision to shift the expiry day of Nifty Bank derivative contracts to Fridays demonstrates their commitment to improving trading efficiency and enhancing market focus. This adjustment allows traders to align their strategies with the revised schedule, while maintaining the same contract specifications. By providing clear communication channels and updates, the NSE ensures that market participants stay informed and adapt to the new expiry days seamlessly.
